[SOLVED] JWI 515 Strayer Univeristy Industry and Company Analysis Paper – Economics

JWI 515: Managerial Economics
Academic Submissions and Evaluation
Assignment 4: Industry and Company Analysis (Weight: 25%)
Due by Sunday, Midnight of Week 9
Your Assignment
Next month, you will be meeting with a group of investors to discuss the possibility of a capital investment
in your current company (or a company of interest) to significantly expand operations. The company’s
Board of Directors will also attend the meeting. To prepare for your presentation to these decision-makers
and stakeholders, you need to conduct a thorough and honest evaluation of your company and its
products or services.
Instructions
Write a paper of 5 to 7 pages in which you evaluate the strengths and weaknesses of your company and its
products or services. To create the structure – sections and subsections – of your paper, use the Sample
Outline provided at the end of these Instructions. You should refer to the course content and show that you
have used online resources to gather both quantitative and qualitative information related to your company.
Professional Formatting Requirements
Your assignment should follow these formatting requirements:
•
Typed, double-spaced, professional font (size 10-12), include headings and subheadings, with one-inch
margins on all sides
•
Include a Cover page containing the title of the assignment, your name, your professor’s name, the
course title, and the date
•
Include an Abstract: a short summary of your paper that readers can use as an overview
•
Utilize the Sample Outline provided on the next page, or create one of your own that mirrors the grading
Rubric’s deliverables
•
Tables or graphs are encouraged as appropriate and can be embedded within the body of your paper or
added in an Appendix
•
Include a References page that enables the reader to locate original sources. Application and analysis of
course materials and resources are expected, and additional research is welcome
•
The Cover page and References page are not included in the required length
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied,
further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Assignment 4 (1202)
Page 1 of 4
JWI 515: Managerial Economics
Academic Submissions and Evaluation
Industry and Company Analysis – Sample Outline
Use the following Outline to organize your paper. Use the underlined headings as section headings. Use
the prompts in each section to be sure you include the required content. When you have finished your
paper, write an Abstract (summary) of one to two paragraphs that summarizes the main points in your
paper. The Abstract goes on a separate page, right after the Cover Page.
Cover Page
Abstract
On a separate page, write a short summary of your overall evaluation of the company’s prospects
Introduction
Briefly describe the overall structure and purpose of your report
Background and Products (Address the following)
Describe your company’s market sector and industry
Explain the market structure: is it perfect competition, monopoly, monopsony, or oligopoly?
Describe your company’s major products or services
Assessment of Company and Products/Services (Address the following)
Specify the economic factors – such as price elasticity – that impact supply and demand
Specify any other significant economic characteristics, such as utility, type of good, etc.
What non-economic forces – such as weather, business cycles, new technologies or changes in
regulations – can impact your company’s sales and profitability?
Economic Outlook (Address the following)
Using GUIDES, choose a macroeconomic indicator that poses an external concern or points to an area
of risk; explain the implication of this indicator for your company and industry
Using GUIDES, choose a macroeconomic indicator that provides some reassurance or points to future
growth; explain the implication of this indicator for your company and industry
Summarize the outlook for investors in the short-term (5 to 7 years), specifying any major favorable or
unfavorable elements from your research
Summarize the outlook for prospective investors in the long-term (8+ years), specifying any major
favorable or unfavorable elements from your research
Conclusion
Briefly recap and summarize the major findings of your report
References
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied,
further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Assignment 4 (1202)
Page 2 of 4
JWI 515: Managerial Economics
Academic Submissions and Evaluation
RUBRIC: Assignment 4: Industry and Company Analysis
CRITERIA
1. Describe the
company’s
market sector,
industry, market
structure, and
major products
or services.
Weight: 20%
2. Assess the
impact on the
company and its
major products
or services of
economic
factors and noneconomic
forces.
Unsatisfactory
Low Pass
Pass
High Pass
Honors
Does not or
minimally
describes the
company’s
market sector,
industry, market
structure, and/or
major products
or services.
Partially
describes the
company’s
market sector,
industry, market
structure,
and/or major
products or
services.
Satisfactorily
describes the
company’s market
sector, industry,
market structure,
and/or major
products or services.
Very good description
of the company’s
market sector,
industry, market
structure, and/or
major products or
services.
Exemplary description
of the company’s
market sector,
industry, market
structure, and/or
major products or
services.
Does not or
minimally
assesses the
impact on the
company and its
major products
or services of
economic factors
and noneconomic forces.
Partially
assesses the
impact on the
company and its
major products
or services of
economic factors
and noneconomic forces.
Satisfactorily
assesses the impact
on the company and
its major products or
services of economic
factors and noneconomic forces.
Very good
assessment of the
impact on the
company and its
major products or
services of economic
factors and noneconomic forces.
Exemplary
assessment of the
impact on the
company and its
major products or
services of economic
factors and noneconomic forces.
Does not choose
appropriate
indicators and/or
does not explain
the implication
for the company
and industry of
either of the
indicators.
Chooses
appropriate
indicators and
provides a basic
explanation of
the implication
for the company
and industry of
one or both
indicators.
Chooses
appropriate
indicators and
provides a
satisfactory
explanation of the
implication for the
company and
industry of both
indicators.
Chooses
appropriate
indicators and
provides a very
good explanation of
the implication for
the company and
industry of both
indicators.
Chooses
appropriate
indicators and
provides an
excellent
explanation of the
implication for the
company and
industry of both
indicators.
Weight: 20%
3. Choose one
macroeconomic
indicator that
poses an
external concern
and one
indicator that
provides some
reassurance.
For each
indicator, explain
the implication
for your
company and
industry.
Weight: 20%
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied,
further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Assignment 4 (1202)
Page 3 of 4
JWI 515: Managerial Economics
Academic Submissions and Evaluation
CRITERIA
4. Evaluate shortterm and longterm economic
outlooks,
specifying major
favorable or
unfavorable
elements from
the student’s
research.
Unsatisfactory
Weight: 10%
6. Writing
mechanics;
clarity of
expression;
adheres to
formatting
instructions;
uses sections
from Sample
Outline.
Pass
High Pass
Honors
Does not
evaluate shortterm and longterm economic
outlooks and/or
does not specify
major favorable
or unfavorable
elements from
the student’s
research.
Provides a
partial evaluation
of short-term
and long-term
economic
outlooks and
specifies a few
major favorable
or unfavorable
elements from
the student’s
research.
Provides a
satisfactory
evaluation of shortterm and long-term
economic outlooks
and specifies major
favorable or
unfavorable
elements from the
student’s research.
Provides a very
good evaluation of
short-term and longterm economic
outlooks and
specifies major
favorable or
unfavorable
elements from the
student’s research.
Provides an
exemplary evaluation
of short-term and
long-term economic
outlooks and
specifies major
favorable or
unfavorable elements
from the student’s
research.
Poorly written or
no Conclusion;
the Abstract is
missing or very
poorly written;
minimal or no
Sources are
used.
The Conclusion
and the Abstract
are partially
adequate; some
appropriate
Sources are
used in a few
parts of the
paper.
The Conclusion and
the Abstract are
satisfactorily well
written; multiple
Sources are used in
the paper.
The Conclusion and
the Abstract are very
well written; Sources
are numerous and
used effectively in the
paper.
The Conclusion and
the Abstract are
excellently written;
Sources are
numerous and applied
in an exemplary
fashion throughout
the paper.
Multiple
mechanical
errors; unclear
expression of
ideas; fails to
follow formatting
instructions;
minimal use of
sections from
Sample Outline.
Several
mechanical
errors; flow of
ideas is
confusing in
parts; follows
formatting
instructions;
makes use of
some sections
from Sample
Outline.
More than a few
mechanical errors;
flow of ideas is
satisfactory; follows
formatting
instructions; makes
use of all sections
from Sample Outline.
Few mechanical
errors; flow of ideas is
concise and clear;
follows formatting
instructions; makes
use of all sections
from Sample Outline.
No mechanical errors;
text flows and
concisely, clearly, and
exemplarily expresses
the student’s ideas;
follows formatting
instructions; makes
use of all sections
from Sample Outline.
Weight: 20%
5. Student
writes a good
Conclusion and
Abstract; good
use of Sources
(References).
Low Pass
Weight: 10%
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied,
further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Assignment 4 (1202)
Page 4 of 4
JWI 515: Managerial Economics
Week 9 Lecture Notes
Global Trade and Tariffs
What It Means
In this lecture, you will learn about the worldwide system of trade that has developed in recent
decades, as a result of the forces of globalization. This system includes a wide range of elements
and features, such as movement of goods and people across national borders, freedom of trade
and barriers to trade, economies of scale, international finance and currency exchange rates. We
will examine how the global trading system works and discuss the challenges and benefits of the
global marketplace for businesses.
A key challenge in the global marketplace is the use of barriers by individual countries to control
or limit imports. We will examine tariffs, a major tool used for this purpose. While governments
see tariffs as a means to protect domestic industries, many economists see tariffs as a divisive
measure with a negative impact, since the cost is passed on to another sector of the market in
the same country. We will explore how tariffs work and examine a recent example of the use of
tariffs to assess the merit of these two points of view.
Why It Matters
•
Your business and trading prospects are affected by trends in the global economy
•
Free trade is impeded by tariffs imposed by one country to limit international imports
•
Leaders who understand global trade and tariffs can make better strategic decisions
“Global ventures invite a whole new level of risk
into your business.”
Jack Welch
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 9 Lecture Notes (1202)
Page 1 of 5
JWI 515: Managerial Economics
Week 9 Lecture Notes
WHAT IS THE GLOBAL ECONOMY?
When we say, “Our business operates in a global economy,” what do we mean? Economic
activity between multiple countries is intertwined in numerous ways and, as a result, actions in
overseas markets can affect our business negatively or positively. The global economy, also
known as the worldwide economy, is all the economies of the world considered together as one
economic system. The term also refers to the system of trade and industry across the world that
has emerged in recent decades, due to the forces of globalization.
Features of the Global Economy
Whether your business is a small startup, a medium sized enterprise, or a large multinational
corporation, its operation and competitiveness are affected by trends in the larger global
economy. While global markets are complex systems, the overall global economy does have
certain key features and effects. By understanding these aspects of the global economy, you can
function more effectively as business leaders.
•
Globalization
This term describes how national and regional economies and societies have become
integrated into a global network of trade, communication, immigration, transportation, and
exchange of ideas. Over time, this has led to the evolution of the global economy. Internet
connectivity provides easy access to international markets, and the growth of IT
infrastructure has enabled exponential growth in the global economy.
•
International Trade
This term refers to the exchange of goods and services between different countries and
regions. International trade is an effect of the forces of globalization described above. As
the global market grows, countries can specialize in particular products for which they
have a comparative advantage. In economic terms, we say they can produce those goods
and services at a lower opportunity cost than their trade partners. And they can buy other
products that they need from their international trading partners.
•
International Finance
Money can be transferred between countries at a faster rate than goods, services, and
people. As a result, international financial transactions have become one of the primary
features of the global economy. This, in turn, has increased the significance of exchange
rates between different currencies, especially the major currencies, such as the American
dollar. Therefore, it is important for business leaders to have a broad understanding of
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 9 Lecture Notes (1202)
Page 2 of 5
JWI 515: Managerial Economics
Week 9 Lecture Notes
such matters as monetary policy and currency exchange rates.
•
Global Investment
In the global economy, investment strategy does not have to be limited by geographical
boundaries. While investment in business still happens locally and nationally, there is also
a parallel system of global investment. This phenomenon includes corporations in one
country investing in another country or region, as well as overseas investment projects
funded by governments, banks, and international organizations.
Challenges of the Global Economy
The global economy is constantly changing, due to complex shifts in production of goods and
services, currency exchange rates, trading agreements, and government regulations. All these
factors must be considered by business leaders when creating a strategy for their business to
engage in trade and competition in the global marketplace. The interplay between these various
factors creates a multitude of possible scenarios that may play out for any particular business.
An international trading transaction involves currencies from at least two countries, so an
exchange rate is needed for goods and services to be exported or imported. But exchange rates
are not fixed; they change constantly and are impacted by multiple market factors. These
changes in exchange rates add complexity to market transactions and this make planning more
challenging for all the business entities involved in global markets.
International trading relationships can be affected by political differences between trading
partners. Trade wars or political differences can lead countries to impose barriers to international
trade. Two major types of barriers are trade tariffs – taxes on imported goods – and trade quotas limitation on the quantity of a product that can be imported. Governments will argue that they use
these barriers to protect their domestic industries, but free market advocates point to the
negative effects that can result from over-use of protective measures.
Benefits of the Global Economy
The global economy also has many potential benefits, some of which are described below.
•
Free Trade
Free trade allows countries to exchange goods and services without barriers such as tariffs
or quotas. It also allows countries to specialize in the production of goods and services for
which they have a comparative advantage and expertise. Free trade is supported by the
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 9 Lecture Notes (1202)
Page 3 of 5
JWI 515: Managerial Economics
Week 9 Lecture Notes
activities of the World Trade Organization (WTO), an international organization founded in
1995. It has 164 member countries and it facilitates agreements between its members to
encourage and enhance free trade on a global scale.
•
Movement of Labor
Increased migration of people can be an advantage for the host country, as well as for
workers. For example, if a country is going through a phase of high unemployment,
workers can move to other countries to find jobs. Or, if a country is short of a particular
skillset, it can provide incentives to attract foreign workers with that expertise. Free
movement also helps in reducing geographical inequality.
•
Increased Economies of Scale
In the global market, countries usually specialize in certain products, for which they have
raw materials, cost-effective means of production, and/or technical expertise available.
Greater specialization lets countries benefit from economies of scale, the saving in costs
that results from an increased level of production. This leads to an economic benefit in the
form of lower average costs of production, which translates into lower prices for customers.
•
Increased Investment
Due to the presence of an interconnected global economy, it has become easier for many
countries to attract short-term and long-term economic investment. Investment by richer
nations in developing countries is a benefit because such projects can contribute to
improvement of the economies of the developing nations.
THE PROS AND CONS OF TARIFFS
What is a tariff, exactly? A tariff is a tax on imports, also known as a duty or a trade barrier,
imposed by the government. The rationale for imposing a tariff is generally to protect domestic
production and jobs. Tariffs are used by the U.S. government to protect certain industries that are
perceived as essential or which have strong political influence. The tariff raises the cost of a
particular import, thus reducing the amount of that product imported into the U.S. This provides
some revenue for the government and it can improve the economics of producing that particular
product domestically.
However, other consequences may offset these benefits of tariffs. Firstly, it usually takes some
time for the U.S. industry to increase production of the goods concerned, and meanwhile there is
a shortage of that product. As a result, importers must pay more for supplies. Either the importers
will have a lower profit margin or they will pass on the extra cost to customers as higher prices.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 9 Lecture Notes (1202)
Page 4 of 5
JWI 515: Managerial Economics
Week 9 Lecture Notes
Secondly, the country that has to pay the tariffs may impose their own tariffs on U.S. exports in
retaliation. This action raises prices for U.S. consumers, albeit in another sector of the market.
Overall, economists argue that, while tariffs may benefit one sector or industry, other domestic
sectors and customers within the U.S. ultimately pay the price for the tariffs.
How Tariffs Work
Let’s look at a recent example to understand the effects of tariffs. In September 2018, President
Trump imposed tariffs of 10% on a range of Chinese imports worth $200 billion. Walmart
predicted the tariffs would lead to higher prices or lower profits. Bicycles were one product on the
new tariff list. A 10% tariff on a bike with a wholesale cost of $60 adds $6 to Walmart’s cost of
importing that bike. Walmart could pay $3 more and pass the rest of the increase on to
customers, with a price rise of $3. Both retailer and consumer lose money in this scenario.
Another frequent consequence of tariffs is currency adjustment. In this example, as China’s
economy slowed in the year following the imposition of tariffs, the Chinese yuan depreciated 11%
versus the American dollar. As a result, Chinese goods cost American importers somewhat less,
because of the stronger dollar, which reduced the negative effect of the tariffs.
In May 2019, President Trump raised the tariffs on the same $200 billion range of imports from
10% to 25%. Now retailers like Walmart had another challenge. Again, they had to decide how
much of the extra cost to pass on to customers and how much to subtract from their own profits.
In the event, the Federal Reserve reports that the price of bicycles imported from China only
increased by a small amount in the second half of 2019. They concluded that American importers
are bearing most of the cost of the tariffs on this particular import.
Wrapping Up
In this final lecture, to wrap up your learning about economics and its relevance for your role as a
business leader, you have explored the multi-faceted phenomenon of globalization. You gained a
broad understanding of some of the key features of the global economy, as well as examining its
potential impacts on your business and industry. You also explored how governments use tariffs
to protect domestic industries and you considered some of the pros and cons of using these tools
to limit free trade between nations.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 9 Lecture Notes (1202)
Page 5 of 5
Internal Memo
TO: Professor Brandon Foor
FROM: Eric T Smith
DATE: February 21, 2020
RE: Managerial Economics 515 – Assignment 3 – Price Discrimination Memo
Introduction
In the wake of shrinking profits, it has come to the attention of management that it is time
for the company to rethink its pricing strategies. The pricing approach that a company adopts has
a massive impact on sales and revenues. Changing the company’s model will enable the business
to take advantage of the best pricing strategies to fix the current problem. This memo proposes
third-degree price discrimination and two-part tariff as the suitable pricing strategies, while also
demonstrating their short-term and long-term impacts of demand.
Product and services
Speedonet Home and Office Fiber (SHOF) has been a leading provider of home and
office fiber connections for many years. SHOF sells customized routers and fiber optic
connections throughout the country. It also sells mobile wireless routers, which can use while on
the go. SHOT is committed to offering people fast and reliable internet connections in their
homes and offices, making sure they enjoy an uninterrupted internet connection. Having been in
the industry for a long time, SHOF has a vast clientele base. The recent years has seen a
proliferation of new entrants in the market. Market concentration has reduced profits,
necessitating rapid actions. In the past, SHOF has leveraged its competitive position by offering
high-quality products and services. The company has one of the best customer services in the
past. The enterprise uses low-pricing for its products. Installation charges have, however, locked
out many customers. The new pricing strategies will make it very cheap to install fiber in homes
and offices, thereby increasing sales.
Price Discrimination Proposals
Third-degree price discrimination involves categorizing customers into various segments
based on demographic and geographic factors and charging a different price for every category
(Cowan, 2012). The company will charge different rates based on a client’s location, where
people closer to the main network centers will pay low than those who are far away. The
company can also charge different prices based on customers’ behaviors, such as charging low
prices for heavy internet users, like offices and companies. Consumer behaviors differ across
market segments, and they affect consumer buying decisions (Week 7Lecture notes). The
company will also develop cheaper packages for low-income earners so that they pay less than
what the general clientele population pays. Currently, the price for installation is $80. Thirddegree price discrimination will see the prices go for as low as $30. The strategy will increase
sales for those who will benefit from reduced prices and cheaper packages.
Another pricing strategy that will suit the business is the two-part tariff system. In this
strategy, the company will sell the routers at incredibly lower prices, knowing that customers
will require to buy a subscription to use the service. Cutting prices on installations and routers
will make it possible for many people and companies to buy out products. Once they have
installed, they will start paying for them to get the internet. This strategy focuses on the “last
mile” aspects of marketing, which looks at how consumers decide to buy the products (Soman,
2015). The two-part tariff strategy will make installations free, thereby allowing many people to
install fiber internet in their homes and offices.
Impact on consumer demand
These two strategies will increase consumer demand by 30-50% in the first three months
and up to 90% in eighteen months. The idea of these strategies is to make the products cheaper
without compromising on internet speed and quality of service. The first strategy will lead to the
creation of various market segments, enabling the company to offer the best deals depending on
demographics, customer behavior, and geographic location. The two-part tariff will reduce the
upfront costs of installation, thereby creating new demand for fiber internet. Increased sales will
enable the company to reduce the price of subscriptions further because it will be enjoying
economies of scale.
Conclusion
Market concentration has seen the company making low sales, hence reducing revenues
and profits. Responding to the situation requires new pricing strategies. The company should
implement third-degree price discrimination and a two-part tariff. These two strategies will
increase demand both in the short-term and long-term, hence bringing the company to enjoy
economies of scale and high profitability.
References
Cowan, S. (2012). Third‐Degree Price Discrimination and Consumer Surplus. The Journal of
Industrial Economics, 60(2), 333-345.
Soman, D. (2015). The last mile: Creating social and economic value from behavioral insights.
University of Toronto Press.
Week 7 Lecture Notes, Consumer behavior.
JWI 515: Managerial Economics
GUIDES Worksheet
The Components of
GUIDES
G:
U:
I:
D:
E:
S:
GDP & Growth
Unemployment & Utilization
Inflation & Interest Rates
Debt & Deficits
External Balances & Exchange Rates
Savings & Investment
The purpose of the GUIDES Indicators Worksheet is to help the business leader collect macroeconomic data with confidence
and accuracy.
NOTE: This worksheet is an adaptation of a macroeconomic analysis framework presented in: Weinzierl, Matthew, Shlefer, Jonathan, and Cullen, Ann. “GUIDES: Insight
through indicators.” Harvard Business School 9-710-044. December 19, 2011 (2011): 1-9
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or
in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 1 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
Instructions
You will use this Worksheet to collect your data in the form of Economic Indicators for two Countries. There are six sections that you need
to complete: G, U, I, D, E, and S. When they are all complete, you will be ready to submit the Worksheet document as Assignment 1.
I. Follow these steps to save your GUIDES Worksheet document:
Note: The GUIDES Worksheet is a standard Word document
•
•
To save the worksheet on your computer for use in Assignment 1, complete the following steps:
o
Go to File > Save As
o
Choose your Destination (a folder on your computer)
o
Name your document as shown below and then click Save
Use the following format for your filename: LastName_FirstName_JWI515_GUIDES_Worksheet.docx
o
e.g. Doe_John_JWI515_ GUIDES_ Worksheet.docx
II. Follow these steps to collect your data:
•
Enter your two Country names at the top of each page
•
Use the two websites below to find your data:
o Trading Economics website (http://www.tradingeconomics.com)
o Doing Business website (http://www.doingbusiness.org)
•
Enter your data and notes in the Worksheet by clicking into the cells with the Latest Entry, Trend, and Healthy? labels
•
In the Healthy? Column, you may delete the answers that are not correct, or you may highlight the correct answer
•
Submit your GUIDES Worksheet document as Assignment 1 by the end of Week 3
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or
in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 2 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
Sample Data – Use examples below as a model on how to complete your GUIDES Worksheet.
Country: United States
Indicator
Consumer
Spending
Food
Inflation
Wage
Growth
Sales Tax
Meaning
Private consumption, or an
exchange of money for goods
and services. Includes private
purchases of durable goods,
nondurables, and services.
Change in the cost of food
over the same month in the
prior year.
Change in wage and salary
disbursements from service,
government, & manufacturing
industries over the same
month in the prior year.
Tax charged to consumers
based on the purchase price
of certain goods and services.
Latest Entry &
Frequency
$11922bil
Oct2017
Quarterly
1.20%
Oct2017
Monthly
3.22%
Sep2017
Monthly
0%
Yearly
Country:
Trend
Healthy (Y/N)
& Why?
Steady rise since
2010.
$11853bil in
Jul2017.
$11758bil in
Apr2017.
Yes – a rise
in spending
indicates a
growing
economy
Steady rise since
in
Oct2016.
0% in Feb2017.
0.9% in June2017.
Yes – when
an economy
is not running
at capacity,
inflation
increases
production
Steady rise.
2.75% in Aug2017
2.49% in Jul2017
Yes –
company can
charge more
for goods and
pay higher
wages
Flat, no change.
No national sales
tax in the US.
No- Gov’t
taxes only
personal &
corporate
incomes.
Latest Entry
& Frequency
$91795mil
Jul2017
Quarterly
5.70%
Oct2017
Monthly
0.7%
Jan2017
Monthly
17%
Yearly
Mock Country Data
Trend
Healthy
(Y/N) &
Why?
Steady rise since
2008.
91584mil in
Apr2017.
91475mil in
Jan2017.
Yes – a
rise in
spending
indicates a
growing
economy
Relatively flat.
+/- 0.25% for past
year.
No –
assumes
production
at capacity
and demand
will start to
fall off
Holding flat
0.6% in Oct2016
0.6% in Jul2016
Not clear
Same since 2004.
1989-2003 = 15%.
France/UK = 20%
Italy = 22%
Sweden = 25%
Yes. On
par with
other
advanced
economies.
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in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 3 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
G = GDP & Growth
Click here to access the Trading Economics website
Country:
Indicator
Meaning
Latest Entry &
Frequency
Country:
Trend
Healthy
(Y/N) &
Why?
Latest Entry &
Frequency
Trend
Healthy
(Y/N) &
Why?
GDP Value
Measures national income and
output. GDP is equal to the total
expenditure for all final goods and
services produced within the country.
Yes
No
Not clear
Yes
No
Not clear
GDP Value
Constant
Prices
GDP adjusted for inflation. Measures
the GDP value in base year dollars.
Yes
No
Not clear
Yes
No
Not clear
GDP
Annual
Growth
Rate
Percentage change in GDP.
Yes
No
Not clear
Yes
No
Not clear
GDP per
capita PPP
GDP value divided by total
population.
Yes
No
Not clear
Yes
No
Not clear
Ease of
Doing
Business
Higher rankings (a low numerical
value) indicate better, usually
simpler, regulations for businesses
and stronger protections of property
rights.
Yes
No
Not clear
Yes
No
Not clear
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or
in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 4 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
U = Unemployment & Utilization
Click here to access the Trading Economics website
Country:
Indicator
Meaning
Latest Entry &
Frequency
Country:
Trend
Healthy
(Y/N) &
Why?
Latest Entry
& Frequency
Trend
Healthy
(Y/N) &
Why?
Unemployment
Rate %
Percentage of unemployed
workers in the total labor
force. It is low during good
economic times and high
during recessions.
Yes
No
Not clear
Yes
No
Not clear
Labor Force
Participation
Number of people who are
either employed or are
actively looking for work.
Yes
No
Not clear
Yes
No
Not clear
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in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 5 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
I = Inflation & Interest Rates
Click here to access the Trading Economics website
Country:
Indicator
Meaning
Interest
Rate %
The price for holding
money – time value of
money or cost of money.
Inflation
Rate %
Represents the long run
inflation rate; transitionary
price changes are
excluded.
Latest Entry &
Frequency
Country:
Trend
Healthy
(Y/N) &
Why?
Latest Entry &
Frequency
Healthy
(Y/N) &
Why?
Trend
Yes
No
Not clear
Yes
No
Not clear
Yes
No
Not clear
Yes
No
Not clear
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in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 6 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
D = Debt & Deficits
Click here to access the Trading Economics website
Country:
Indicator
Meaning
Latest Entry &
Frequency
Country:
Trend
Healthy
(Y/N) &
Why?
Latest Entry
& Frequency
Trend
Healthy
(Y/N) &
Why?
Government
Debt
Debt owed by a government.
(also known as public
interest, national debt and
sovereign debt)
Yes
No
Not clear
Yes
No
Not clear
Government
Debt/GDP
Ratio between a country’s
government debt and its
gross domestic product. A
low ratio indicates that the
country can sufficiently pay
back its debts without
incurring debts.
Yes
No
Not clear
Yes
No
Not clear
Credit
Rating
An estimate of the ability of
an entity to fulfill its financial
commitments.
Yes
No
Not clear
Yes
No
Not clear
Corporate
Tax Rate
The tax rate for
Corporations.
Yes
No
Not clear
Yes
No
Not clear
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or
in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 7 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
E = External Balances & Exchange Rates
Click here to access the Trading Economics website
Country:
Indicator
Meaning
Latest Entry &
Frequency
Country:
Trend
Healthy
(Y/N) &
Why?
Latest Entry
& Frequency
Healthy
(Y/N) &
Why?
Trend
Currency
A system of money. The
value of the money
changes over time.
Yes
No
Not clear
Yes
No
Not clear
Imports
Amount of goods
purchased by one country
from another.
Yes
No
Not clear
Yes
No
Not clear
Amount of goods
purchased
by foreigners from a
country.
Yes
No
Not clear
Yes
No
Not clear
Exports
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or
in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 8 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
S = Savings & Investment
Click here to access the Trading Economics website
Country:
Indicator
Meaning
Latest Entry &
Frequency
Country:
Trend
Healthy
(Y/N) &
Why?
Latest Entry &
Frequency
Healthy
(Y/N) &
Why?
Trend
Personal
Savings
When a person rather than
a company saves money to
spend or invest later.
Yes
No
Not clear
Yes
No
Not clear
Consumer
Confidence
Based on consumers’
perceptions of current
business and employment
conditions, as well as their
expectations for six months
hence regarding business
conditions, employment,
and income.
Yes
No
Not clear
Yes
No
Not clear
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or
in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 9 of 10
JWI 515: Managerial Economics
GUIDES Worksheet
Additional Indicators (optional)
Click here to access the Trading Economics website
Use this optional page to capture data on Indicators that you believe are relevant to understanding your chosen country’s
economy or relevant to your specific industry. Potential additional indicators include, but are not limited to:
•
Business Confidence
•
External Debt
•
Living Wage Family
•
Capacity Utilization Rate
•
Foreign Direct Investment
•
Personal Income Tax Rate
•
Consumer Price Index
•
Government Spending
•
Productivity
•
Disposable Personal Income
•
Housing Starts
•
Tourist Arrivals
Country:
Indicator
Meaning
Latest Entry &
Frequency
Country:
Trend
Healthy
(Y/N) &
Why?
Latest Entry &
Frequency
Healthy
(Y/N) &
Why?
Trend
Yes
No
Not clear
Yes
No
Not clear
Yes
No
Not clear
Yes
No
Not clear
Yes
No
Not clear
Yes
No
Not clear
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or
in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.
JWMI 515 – GUIDES Worksheet (2012)
Page 10 of 10
JWI 515: Managerial Economics
Week 7 Lecture Notes
Consumer Behavior
What It Means
In this lecture, you will learn about patterns in consumer purchasing behavior and explore the
concept of Marginal Utility. This concept explains how customers make purchasing decisions and
it accounts for variations in customer behavior, depending on factors such as the quantity of units
purchased, the type of goods or services being sold, and the buyer’s income level.
Price Elasticity is a key microeconomic concept that will be covered in this lecture. It explains the
way that consumers respond to price changes, which varies for different types of product and
service. Sensitivity to price is also affected by consumer income level, and we will explore this
aspect of the equation. In addition, certain other goods in the market are related to a product or
service, as either substitutes or complements, and this economic relationship will be explained.
As a business leader, you can use your knowledge about consumer behavior and Price Elasticity
to analyze customer demand for your company’s products. In turn, this understanding will enable
you to design pricing strategies that increase the competitive strength of your business.
Why It Matters
•
Patterns of consumer behavior explain changes in demand for goods and services
•
Price Elasticity explains how consumers respond to price changes for different goods
•
Understanding consumer behavior and Price Elasticity leads to better pricing strategies
“People spend their money in whatever way they think will make them most
happy—which usually means buying a variety of goods and services.”
Frakt & Piper
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distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 7 Lecture Notes (1202)
Page 1 of 5
JWI 515: Managerial Economics
Week 7 Lecture Notes
DEMAND ANALYSIS
Economics is all about human behavior, and this includes the way people decide how to deploy
their resources as individual consumers, business leaders, and governments. Emotions drive
demand for goods and services. Consumer behavior helps determine whether a business entity
grows or shrinks, succeeds or fails, and thus it is central to the successful implementation of a
business leader’s plans. While you, as a business leader, cannot predict precisely what your
customers will do, you can make an educated guess by analyzing consumer demand. This
process requires you to understand how consumers make purchasing decisions. When you
understand that, you can better position your company for competitive advantage in the market.
Utility is an economic measure of people’s satisfaction with a particular good or service. The
more utility a good or service has, the happier consumers are when using it. If your company’s
good or service fails the utility test, demand for that item will decrease. Either consumers will not
buy it in the first place or, if they do not have a good experience after buying it, they will sell it,
donate it or otherwise dispose of it. In that case, the next time they need that type of good or
service, they will move away from your brand and look for another seller, reducing your sales.
Marginal Utility and Demand
Marginal Utility is defined as the amount of satisfaction gained from consuming one more unit of
a product. For example, let’s say a customer eats 10 chicken tenders for lunch. She gains a
certain amount of satisfaction from the meal. How much more satisfaction will she gain from
eating an eleventh chicken tender? What if she is really hungry and orders 20 chicken tenders?
Will she even eat them all? If not, is the additional cost worth it?
Buying more chicken than you can comfortably eat, and thus wasting money on those additional
units, illustrates the law of diminishing marginal utility. This law states that, as additional units of
a product are consumed in a given period of time, the Marginal Utility gained – the satisfaction
derived from just one more item – will begin to decrease. This principle can be applied to pricing
strategy as follows: since people derive less satisfaction from consuming more and more of the
same thing – whether that is chicken, designer shoes, or video games – consumers will only
purchase more of the same commodity if they can get the items at a steadily decreasing price. In
other words, customers expect to be given a discount when they purchase a larger number of
items. This concept is illustrated graphically by the downward sloping demand curve in Figure 1.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 7 Lecture Notes (1202)
Page 2 of 5
JWI 515: Managerial Economics
Week 7 Lecture Notes
Figure 1 depicts a change in the price that
consumers will pay per unit, as the quantity they
purchase increases:
• When the quantity is 10 units, customers will
pay $45 per unit
• When the quantity is 80 units, customers will
only pay $10 per unit
Figure 1. Downward sloping demand curve.
This downward sloping curve of demand is fundamental to how consumers think. Understanding
this helps us understand how our customers make decisions, and therefore it allows us, as
business leaders, to be more successful in marketing our product or service to them. In
particular, it helps us to fine tune our pricing strategies for maximum effect.
TYPES OF GOOD
In addition to the effect of the quantity of units purchased, demand is also affected by the type of
good or service that the customer is buying. Economists divide types of goods into three major
categories: Inferior goods, Normal goods, and Superior goods.
•
Inferior goods are affordable items, such as a meal at a fast food restaurant, off-brand
electronics, and discount store clothing. The demand for inferior goods declines as the
consumer’s income rises.
•
Normal goods are higher quality items than inferior goods, such as a meal at a good chain
restaurant, name-brand electronics, and department store clothing. In contrast
to inferior goods, demand for normal goods increases as the consumer’s income rises.
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distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 7 Lecture Notes (1202)
Page 3 of 5
JWI 515: Managerial Economics
Week 7 Lecture Notes
•
Superior goods are the highest quality, luxury items, such as a meal at a high-end
restaurant, the latest technology, and designer clothing. As with normal goods, the
demand for superior goods increases as a consumer’s income rises. Eventually, if the
consumer’s income rise is significant, demand for superior goods will replace demand for
inferior goods.
PRICE ELASTICITY
Customers are sensitive to price changes in a way that varies from product to product and from
service to service. For example, customers may change their buying behavior relatively quickly
when the price of eggs rises or falls at the grocery store. By contrast, they might not vary their
buying behavior as much – they might not be as price sensitive – when the price of popcorn at
the movie theater rises from very high to outrageously high.
Economists use the word elasticity for this response of consumers to price changes. The Price
Elasticity of Demand is a measure of how responsive consumers are to changes in the price of
the product, if all other factors stay constant. A product is elastic if a change in the price
generates a significant change – up or down – in the quantity purchased. It is inelastic if a
change in the price generates little change in the quantity purchased.
Price Elasticity of Demand directly affects a company’s revenue. A price increase for an elastic
product can decrease total revenue because the company sells a smaller volume of the product
at that higher price. Sellers of inelastic products, by contrast, can increase prices without so
much impact on their revenue, since most consumers will still purchase the product. Thus, the
elasticity of their products directly impacts their pricing strategy.
To determine how elastic your product is, you must examine the wants and needs of your
customers. The two examples below show how the principle of elasticity works in practice:
•
Company A sells adventure vacations, which is an elastic product. Since it is a luxury
item, consumers may remove it from their budget if it becomes more expensive.
Therefore, if the company increases prices too much, they will lose a lot of sales.
•
Company B sells milk, an inelastic product. If the price of milk rises, most consumers will
still buy almost the same amount of milk for their families. So, if this company increases
prices, at least by a reasonable amount, they will not lose many sales.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 7 Lecture Notes (1202)
Page 4 of 5
JWI 515: Managerial Economics
Week 7 Lecture Notes
Families are much less sensitive to changes in the price for milk, a basic food item, than they are
to changes in the price of luxury items, such as adventure vacations. In economic terms, we say
that the price of adventure vacations is much more elastic than the price of milk.
Substitutes and Complements
In the last section, we explained Price Elasticity of Demand, based on the assumption that all
other factors stayed constant. However, in the real world, the elasticity of your product or service
is also affected by external factors, including the price of your competitors’ products. If a price
increase in one product increases the demand for another product, those two products are said
to be substitutes. For example, if the price of chicken increases sharply, consumers may
substitute pork or beef for the family dinner. These are related food items that provide protein, so
they can be described as substitute products for chicken.
If an increase in the cost of one product causes a decrease in the demand for another product,
those two products are said to be complements. For example, a sharp rise in the price of ice
cream might prompt consumers to buy less ice cream, and as a result demand for ice cream
cones will also fall. In this case, the ice cream cones are a complementary product to the ice
cream. Since consumers use these two items together, the Price Elasticity of the two products is
connected, and thus demand for the two products moves in a parallel manner.
Looking Ahead
In this lecture, you learned how purchasing decisions and the level of satisfaction experienced by
consumers impacts demand for goods. You also learned about the concept of Price Elasticity
and examined how it applies to different types of goods and services. Finally, you explored how
an understanding of Price Elasticity can be used in real-world situations, to help you design more
effective pricing strategies.
Next week, the lecture explores the increasing significance of Social Impact and Sustainability as
corporate goals. Customers today hold companies accountable for the social and environmental
effects of their business practices. As a result, business leaders need to find new ways to
measure success, in terms of social and environmental impact, as well as through traditional
financial measures of profitability.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 7 Lecture Notes (1202)
Page 5 of 5
JWI 515: Managerial Economics
Week 8 Lecture Notes
Measuring Social Impact
What It Means
In this lecture, you will learn about some major shifts taking place in the way that companies
frame their fundamental goals and assess their results and return on investment. In addition to
traditional measures of success in terms of profitability, customers and investors today hold
companies accountable for the social and environmental effects of their business practices. As a
result of these expectations, business leaders are defining additional, socially-oriented goals and
seeking ways to measure success in terms of social and environmental impact.
To understand this change in the business landscape, we will explore the concept of a for-profit
social enterprise, examining how this new identity affects a company’s goals and operations, as
well as what benefits may follow for those companies that make the transition successfully. Then
we will consider how a for-profit social enterprise can measure its results to encompass social
impact goals. Business leaders must meet the challenge of aligning their company’s social
impact goals with the need to continue being competitive and profitable as a business entity.
Why It Matters
•
Customers and investors expect businesses to create and fulfill social impact goals
•
Successful social enterprises incorporate social impact goals in their business model
•
Business leaders need metrics that can demonstrate social impact and sustainability
“People work all day, every day, trying to … help their families, their employees
and colleagues, their customers, and the communities where they operate.”
Jack Welch
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distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 8 Lecture Notes (1202)
Page 1 of 5
JWI 515: Managerial Economics
Week 8 Lecture Notes
SOCIAL ENTERPRISES
What is a “Social Enterprise”? Traditionally, non-profit organizations focused on social good,
while corporations focused on growth and profitability. Business leaders cared about sales and
revenue, measuring productivity in terms of financial success. In today’s business environment,
however, many stakeholders expect more than financial success from their business affiliates.
Customers, investors, and business partners look for companies that do more than just providing
a product or service. They want to invest in, buy from, and partner with companies that have a
positive social impact. They feel a stronger connection to companies whose values align with
their own. This trend has led to the term “Social Enterprise”, used to describe a for-profit
business whose mission includes social impact and sustainability goals.
As the demand for socially responsible business practices has grown, companies have adopted
social goals that run parallel to their financial goals. They have discovered that positive social
impact and financial success are not mutually exclusive – that it is possible to build a profitable
company and to do good in the community at the same time. Business leaders have started to
include considerations of community development and sustainability in their strategic plans and
to look for ways to reduce their carbon footprint through green business practices. The increasing
evidence of climate change has only heightened awareness of the need for every type of
business and every sector of the economy to consider its environmental impact.
Social enterprises do not just happen because the leadership of a for-profit company decide that
they should frame new social impact goals. It requires planning and commitment to reshape a
company’s mission and vision truly. Many companies set up new departments or hire senior
leaders to focus directly on their social impact goals. The most successful social enterprises
understand that they must build social impact and sustainability goals directly into their business
model. Doing good to the community and society at large must become a core element of the
business, not just something that happens as an afterthought.
As an example of a modern social enterprise, let’s consider Starbucks Coffee Company. This
corporation has developed a set of four “commitments” to express how it fits social impact and
sustainability goals into its business model. These commitments are listed below:
§
Source Ethically and Sustainably: We are committed to offering high-quality, ethically
purchased and responsibly produced products.
§
Create Opportunities: We are committed to investing in paths to opportunity through
education, training and employment.
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distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 8 Lecture Notes (1202)
Page 2 of 5
JWI 515: Managerial Economics
Week 8 Lecture Notes
§
Lead in Green Retail: We are committed to minimizing our environmental footprint and
inspiring others to do the same.
§
Strengthen Communities: We are committed to offering Starbucks as a place for public
conversation and elevating civic engagement through service.
As you read these four commitments, you can see how these goals impact all aspects of the
business model, including ethical sourcing of the product, personnel employment and training,
sustainable business operations, and giving back to local communities. You may or may not
believe that Starbucks actually operates according to these socially responsible commitments,
but the rhetoric in this social mission statement is a good example of the way major companies
feel the need to define and express their identity as social enterprises.
There are multiple benefits for companies that embrace the challenge of incorporating social
impact into their business model. Unlike a traditional non-profit organization, that relies on grant
money or donations to achieve its goals, a for-profit social enterprise generates its own finance;
therefore, it has more freedom in how to allocate its funds. A for-profit social enterprise can
usually scale up its social impacts more quickly than a non-profit organization. Profitability and
greater social impact go hand-in-hand, since higher profits for the business venture translate into
more funds for social programs and thus greater social impact. In addition, companies may find
social impact goals beneficial when hiring and retaining staff. Many top job candidates seek
companies whose goals include social good, to match their own values.
MEASURING SOCIAL IMPACT
Social enterprise companies need to measure results for their social impact goals. They need
new metrics that match the multiple, more varied elements now included in their bottom line.
Different tools are needed to measure the results for social impact goals than for sales and
marketing goals. As a result, companies are looking for new metric systems that can take
account of the multiple goals included in their mission.
Business leaders want tools that allow them to demonstrate their company’s success in terms of
social benefit and environmental impact, as well as financial profitability. This need has spurred
many companies, as well as investors and standardization organizations, to experiment with new
systems for framing social impact and sustainability objectives and tracking the results in a
corporate setting. Let’s take a look at some of the new concepts and models that are emerging to
satisfy the business need for ways to measure social impact results.
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distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 8 Lecture Notes (1202)
Page 3 of 5
JWI 515: Managerial Economics
Week 8 Lecture Notes
The Triple Bottom Line
The phrase, “The Triple Bottom Line”, was introduced in 1994 by a British consultancy company
called SustainAbility. They believed companies should prepare three separate bottom lines,
covering the financial, social, and environmental performance of the business. They called this
the three Ps: profit, people, and planet. These three bottom lines are described more fully below:
1. Financial Account: the traditional measure of business success, demonstrated through
numbers from the profit and loss account
2. People Account: a measure of how socially responsible an organization has been, across
all its operations
3. Planet Account: a measure of how environmentally responsible an organization has
been, across all its operations
The Triple Bottom Line concept is based on the fundamental principle that what you measure is
what you get, because what you measure is what you pay attention to. Therefore, if companies
measure their social and environmental impact, they will take those activities seriously and
provide resources to work towards social impact and sustainability goals.
There are many other terms used to describe a corporate approach that encompasses broader
social impact goals: for example, Responsible Business, Sustainable Development Goals
(SDGs), and Corporate Social Responsibility (CSR). Many companies have created new
leadership positions, focused on their new bottom line goals, such as Chief Sustainability &
Social Impact Officer or Head of Responsible Investment. One major challenge for these leaders
is how to measure results effectively in terms of social impact and sustainability goals.
Social Impact Metrics
When investors or executives evaluating potential mergers and acquisitions assess a business
as a potential investment, they examine financial data related to profitability. Increasingly,
however, today’s investors also examine metrics that report on a company’s environmental,
social and governance (ESG) goals. The acronym, ESG, refers to three key areas that can be
measured to determine the sustainability, social impact, and ethical standards of a company. In
recognition of this shift in how investors, buyers, and the public at large evaluate businesses,
development of better ESG measures for corporations has become a key focus area globally.
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distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 8 Lecture Notes (1202)
Page 4 of 5
JWI 515: Managerial Economics
Week 8 Lecture Notes
For example, in 2018, the Corporate Reporting Dialogue launched an initiative called The Better
Alignment Project1, in which an international consortium of business stakeholders are working
together to achieve some standardization in social impact and sustainability reporting. They
advocate disclosure of data that provides comparable social impact and sustainability results for
businesses; this goal will only be possible if better models and standardized frameworks for ESG
and overall social impact reporting are developed.
For another example, let’s take a look at some of the descriptions of financial products2 on the
Bloomberg website. This major financial and business information company includes in its
product descriptions such goals as “Develop and deliver sustainable finance products” and
“Improve our clients’ use of ESG data”. It seems clear that social impact and sustainability goalsetting and reporting in business are becoming mainstream.
Looking Ahead
In this lecture, you learned about the increasing importance of social impact and sustainability as
corporate goals. We explored the concept of a social enterprise in the business sector and
examined several models for goal-setting and metrics in the areas of social impact and
sustainability. You reviewed some examples of how this shift in expectations has impacted goalsetting at for-profit companies, as well as leading to the development of new frameworks to
measure business results in terms of social impact and sustainability goals.
Next week, the lecture examines the effects of the forces of globalization and you will learn about
the significance for your business of the worldwide trading systems that surround you. We will
explore some key features of the global economy and consider its benefits and challenges. The
lecture also discusses the use of tariffs by governments to protect domestic industries and we
will consider some of the unintended consequences that may arise from excessive use of these
barriers to free trade.
1
https://corporatereportingdialogue.com/better-alignment-project
2
https://www.bloomberg.com/impact/products
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further
distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 515 – Week 8 Lecture Notes (1202)
Page 5 of 5
Copyright 2016 by Kelley School of Business, Indiana University. For reprints, call HBS Publishing at (800) 545-7685.
BH743
Business Horizons (2016) 59, 339—346
Available online at www.sciencedirect.com
ScienceDirect
www.elsevier.com/locate/bushor
Designing an emotional strategy:
Strengthening digital channel engagements
Karla Straker *, Cara Wrigley
School of Design, Queensland University of Technology, 2 George Street, Brisbane, Australia
KEYWORDS
Design;
Emotions;
Digital channels;
Customer
relationships;
Digital behavior
Abstract The emergence of new technologies has revolutionized the way companies interact and build relationships with customers. The channel—customer relationship has traditionally been managed via a push approach in communication
(‘‘What can we sell customers?’’) with the hope of cultivating customer loyalty.
However, emotional understandings of customers and how they feel about a product,
service, or business can drastically alter consumers’ engagement, behavior, and
purchasing preferences. This rapidly evolving landscape has left managers at a loss,
and what they are experiencing is likely the beginning of a tectonic shift in the way
digital channels are designed, monitored, and managed. In this article, digital channel
relationships are examined, and useful concepts for clarifying and refining the
emotional meaning behind company strategy and their relationship to corresponding
digital channels are detailed. Using three case study examples, we discuss the process
and impact of such emotionally aware digital channel designs. Recommendations are
made regarding how companies can select, design, and maintain digital engagements
based on their strategy and industry needs.
# 2016 Kelley School of Business, Indiana University. Published by Elsevier Inc. All
rights reserved.
1. The new challenge
Building honest relationships between companies
and customers is paramount to sustained business
success. However, as we move into the digital age,
the way in which we connect has changed. The
Internet and digital channels have impacted this
* Corresponding author
E-mail addresses: k.straker@qut.edu.au (K. Straker),
cara.wrigley@qut.edu.au (C. Wrigley)
interaction; no longer are customers simply downloading or searching for static data, but they are
engaging with and sharing their own content via
social networks. A customer’s constant engagement
with technology and access to information influences
their expectations of companies. Fisk (2006, p. 26)
explained that customers are better informed than
ever before, which has resulted in an environment
where customer expectations are high and loyalty
is rare. By becoming active members in digital
channels, customers are able to voice their concerns
and report on issues such as product quality, lack
0007-6813/$ — see front matter # 2016 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.
http://dx.doi.org/10.1016/j.bushor.2016.01.010
This document is authorized for use only by Eric smith in Managerial Economics at Strayer University, 2020.
340
K. Straker, C. Wrigley
of availability, poor service, and high prices. Everything is now transparent and instantly broadcasted
(Numes & Cespedes, 2003).
The perspective that management is the sole
creator of a company identity is no longer valid.
The involvement of customers in brand building
is now an important source of brand equity
(Parent, Plangger, & Bal, 2011; Schau, Muñiz, &
Arnould, 2009), as more customers are participating
in online dialogues and interacting with each other
in the process of creating the ‘identity of self’
through the identity of a brand. Previous research
has indicated that customers demonstrate valuecreating behaviors above and beyond those that
firms create or anticipate (Schau et al., 2009).
Therefore, it is argued that customer interaction
is increasingly based on inputs provided by other
customers and stakeholders beyond the control of
the company. The exponential growth of data availability and the growing capabilities of digital technologies can now provide companies with valuable
information to make strategic decisions. As a result,
the traditional use of information technology within
organizations has moved beyond functional applications toward a more strategic vision, whether they
are equipped for this shift or not.
The design and management of a company’s
channel is an opportunity to strengthen company
engagement with customers, as customers’ purchase decisions are based on more subjective concepts such as the company identity, branding,
advertising, and channel engagements. Consequently, this demand requires companies to possess
new forms of knowledge and processes that allow
them to create deeper engagements with their
customers. The current literature and industry evidence demonstrates the capability of designers to
create innovative and engaging product solutions;
yet there is little evidence regarding the actual
design and implementation of digital channel strategies. Against this backdrop, we introduce the foundations for designing emotionally aware digital
channel engagements. We also establish the core
characteristics of such digital channels and their
corresponding customer touchpoints along with
strategies for designing such touchpoints to create
and manage customer relationships.
2. Use of design and emotion to
strengthen digital engagements
The field of design and emotion has been studied to
strengthen the role of meaning and to understand
how it can be used to design digital channel engagements. Meaning is heavily intertwined with
emotion, and for the past decade has been a driver
in product design as the creation of value between
customer and product (Norman, 2004). Possessions
are especially important for personal identity, as the
use of products is one way in which an individual can
symbolically define and express who they are (Sirgy,
1982). Richins (1997) explained that by injecting
meaning into products consumers own and view as
valuable, they are able to display a piece of themselves through that product. Belk (1988) suggested
that our possessions contribute to our identities and
also reflect them. Recognizing that we think of our
possessions as part of ourselves is key in understanding the meaning of objects. Through this physical
association between product and person or place,
the product gains symbolic meaning for the owner
(Belk, 1988). Emotions are functional because they
pull us toward certain people, objects, actions, and
ideas and push us away from others (Frijda, 1986).
Pleasant emotions pull us to products that are
(or promise to be) beneficial whereas unpleasant
emotions will push us away from those that are
(or promise to be) detrimental to our well-being
(Desmet, 2008).
According to the marketing literature, a loyal
customer can only be developed if a company can
build emotional connections in addition to positive
attitudes and behaviors (Mattila, 2001). According
to Khan (2012), the vast majority of emotionally
loyal customers have memorable experiences with a
company, which generally leads to positive behavior
toward the company (Mattila, 2001). The research
of Park and Kim (2014) supports the importance of a
company’s awareness of this and revealed that a
company’s digital interactions can influence a customer’s relationship with the company. A customer’s
perception of the investment made by a company in
digital engagements can impact the relationship
quality and customers’ willingness to provide and
share positive company experiences with others
(Park & Kim, 2014). The ability to create engaging
interactions with customers via digital technology
could earn a customer’s trust and result in emotional
investment in (advocacy for) a company. Therefore,
digital channel design should be high on management agendas. As Robinette, Brand, Lenz, and Hall
(2000, p. 4) explained: ‘‘In every encounter there’s
an opportunity to meet a need and make an emotional connection’’ with the customer. However,
research has highlighted that most companies are
unsure how to best seize the opportunity and have
difficulty in making digital channels engaging and
valuable to the customer (Parent et al., 2011;
Schultz & Peltier, 2013). Current research has also
largely failed to capture the use of emotions to
inform business strategy. While there is increasing
This document is authorized for use only by Eric smith in Managerial Economics at Strayer University, 2020.
Designing an emotional strategy: Strengthening digital channel engagements
research on channels as new distribution modes
(Rosenbloom, 2013) and on the emotional aspects
of customer choices in online environments
(Rajamma, Paswan, & Ganesh, 2007), very little
is known about the emotional aspects of company
strategy as a way to inform digital communication
and digital channel strategy.
3. Designing an emotional strategy
By starting with people, companies can uncover
individual customers’ emotional needs and in turn
understand how to design to meet their needs
(Guenther, 2012). This research builds upon Brown’s
(2009) and Guenther’s (2012) theories to inform the
emergence of a new research area. By placing customers’ emotions at the center of a company’s
business strategy, customer relationships can be
strengthened by providing innovative digital channel engagements. The cross-sections of emotion
(people), strategy (business), and digital channels
(technology) form three intersections (Image 1) that
inform three defined areas for the creation of
an emotional digital engagement. This model has
previously been discussed in Straker, Wrigley, and
Rosemann (2015a, 2015b); however, in this article
we provide a novel contribution to the implementation of the three areas of (1) company and customer strategy, (2) digital channel strategy, and (3)
digital customer experience, including a real-world
case study for each. It is important to note that the
process should start with the customer (see Figure 1)
and not an existing technical solution.
Figure 1. The intersection of emotion, strategy, and
digital channels
341
3.1. Company and customer strategy #1:
Knowing and aligning your values
Customers will have associated feelings, emotions,
and moods informed by past experiences with a
company. Associations could be linked to branding,
advertising, or social interactions with the company. In order to provide customers with experiences,
the underlying emotions must first be thoroughly
understood. Understanding the emotional drivers
of a company’s strategy facilitates the emotional
commitment of customers and employees. An emotional commitment develops when a customer identifies with the values of a company to understand its
mission. The importance of a sense of meaning
is heavily explored in the field of design and emotion, as the customer mindset is a key driver of
company performance. If the customer is engrossed
in the experience and brand throughout recurring
engagements, it has the potential to significantly
affect the perception of company value (Verhoef
et al., 2009). However, with the growing number of
channels, companies are faced with the challenge
of unifying their online value across multiple channels and engaging with customers in a way that is
not only consistent with and true to their company
value but also captivates customers in their sense of
meaning. Another challenge with digital channels is
the ability of customers to engage and share their
own content, thus empowering them to express and
publish positive and negative experiences with or
without the permission of the company. Issues such as
product quality, lack of availability, poor service, and
high prices are now transparent and instantly broadcast by the customer, often impacting a company’s
reputation and resulting in the loss of customers and
revenue. However, these new digital channels combined with increasing levels of digital literacy
also allow embedding customers as co-designers
and co-producers of company value and meaning
(see Table 1).
3.1.1. Example #1: Communicating value
through online identity at Burberry
At over 150 years old, Burberry has a rich history.
Its fashion has been adapted for military combat,1
the company has been an official supplier to the royal
family, and its products have been worn by a range
of celebrities (Ahrents, 2013). Burberry is fashion
royalty; however, in recent times it has lost its competitive advantage in the world of global luxury
1
During World War I, Burberry modified its popular, waterproof
sport coat into what is now commonly known as the Trenchcoat.
This document is authorized for use only by Eric smith in Managerial Economics at Strayer University, 2020.
342
K. Straker, C. Wrigley
Table 1.
Company and customer strategy
Aligning and knowing your value involves:
Knowing and communicating underlying emotional drivers of company strategy.
Outlining the purpose, values, strategy, and behavior standards of the company.
Aligning the relationship between company identity and customer needs.
Understanding which emotions are associated with the company strategy and supporting these with the right
digital channel typology and touchpoints (Straker et al., 2015b).
Delivering the appropriate meaning in building equity in the company.
Consistently communicating appropriate digital content that aligns with the company’s emotion code to
design desired digital channel engagements.
Reflect the meaning and value of the company’s strategy and match either the customers’ needs or align with
their values during all engagements.
To accomplish these things, designers need to work closely with all departments of the company to understand
and disseminate the value and align emotions behind the company strategy. Employees need to know the
emotional drivers of the company and the values to inform their communication strategies. By understanding
what emotion you aim to evoke when a customer engages with a company, the right digital touchpoint can be
designed.
brands (Phan, Thomas, & Heine, 2011). Burberry
observed its target customer and realized that millennials are more influenced by peers than by anything a brand may have to say. An insight into
customer emotions and behaviors is imperative in
the luxury section, as the luxury customer is individualistic and knows what they want and how to interpret their personal style. They therefore want to
stamp their personality on a luxury brand and use
products and fashion as a definition of their individual
personality and identity while highlighting the
‘luxury’ prestige status (Ahrents, 2013). By evoking
key emotions such as attraction and stimulation,
Burberry’s digital channels turn mundane digital interactions into social activity. Customers invest time
in designing their own Burberry trench coat while
expressing a desire to be photographed wearing it.
The Burberry website was designed to speak to
the millennial customer through ‘‘emotive brand
content: music, movies, heritage, storytelling’’
(Ahrents, 2013), resulting in these aspects becoming
part of the Burberry story. Each digital channel provides a unique and consistent message that brings
together the brand, culture, and customers in the
same story. This story aligns with the brand value
(British heritage) and the key product (the trench
coat), making the brand accessible to a wider audience, from brand browsers to brand advocates. The
success of Burberry’s digital channel strategy
is evident through the growth impact (brand and
revenue) and high level of customer engagement
with each channel. Burberry’s digital channel presence includes over 16 million followers on Facebook,
three million on Twitter, and over two million on
Instagram (Burberry, 2015).
3.2. Understanding needs #2: Designing
digital channel engagements
The process of creating an emotional experience is
complex and involves many different factors. The
design of digital channels needs to evoke positive
responses, satisfaction, and pleasurable experiences over a period of time, thus informing the experience created. Customer needs determine the type
of interaction the customer wants, highlighting certain feelings, emotions, and moods that are evoked
through interactions with the company.
Traditionally, corporate strategy is shaped by
macro data, industry trend analysis, competitive
analysis, and technology assessments carried out
by specialists focused on quarter-to-quarter sales
(Guenther, 2012). However, quick shifts in customer
preferences, tastes, habits, and lifestyles may not
be able to be anticipated using traditional market
research methods (Sen, 2009). It is for this reason
companies need to be engaged with their customers
on a deeper level to understand not only what they
want but also why they want it (Price, Wrigley, &
Straker, 2015). The field of design and emotion has
various tools and methods to help understand
customer needs, aspirations, and feelings by predominately asking why questions. This empathic
design approach places emphasis on understanding
the emotional aspects of customer—product or
customer—company relationships (Crossley, 2002).
Companies should therefore be delving deeper by
questioning customers and inviting them to interact
rather than simply reacting to questions and instructions. Replacing the passive view of a customer
with an active one can result in new insights and
This document is authorized for use only by Eric smith in Managerial Economics at Strayer University, 2020.
Designing an emotional strategy: Strengthening digital channel engagements
Table 2.
343
Understanding needs
Designing digital channels involves:
Embracing new methods to understand your customers’ needs.
Being equipped with the tools and skills to accurately interpret and translate customer emotions into meaning
and needs.
Choosing the right digital touchpoint to communicate company value while also addressing customer needs.
Evoking feelings, emotions, and moods that align with the brand and customers.
The successful use of customer needs requires a deeper analysis and engagement with customers through all
stages of the project. Once customer needs are understood, the right channel can be designed to address these
needs. A design approach should be applied for this, such as ideating, creating, and testing the idea with
customers. Findings from the first stage should be implemented into the process of designing the digital channel.
opportunities to design interactive and valuable
digital channel engagements. Determining and analyzing different customer affective states is an important step because they inform the emotional
experience of interacting with the company, attributing to the meaning and emotional response.
The relationship formed between customer and
company is also important for future planning and
understanding what is needed to build a strong
relationship over time (see Table 2).
3.2.1. Example #2: Understanding Saturday
Girl at Kate Spade
Four storefronts throughout Manhattan were
painted bright yellow with black and white graphic
patterns (signature of Kate Spade). Apparel and
accessories were featured on hangers and hooks
inside the windows. These displays were only accessible for one month, 24 hours a day. There, passersby got a preview of merchandise from the new
Saturday Girl line. Next to the merchandise was a
large touchscreen where users browsed items and
placed orders, with free delivery anywhere in or
within an hour of Manhattan. The purchase process
simply required entering a mobile phone number
and sending a confirmation text to confirm approval.
A messenger delivered the purchase, and just like a
take-out food order, payment occurred upon delivery via a mobile application. The digital Kate Spade
storefront aimed to evoke desired emotions that
reflect the brand’s identity and represent the way in
which Saturday Girl customers respond to and interact with the channel. The interaction with this
digital channel aligns with the expected emotional
experience of Saturday Girl, from the surprising
pop-up yellow brick buildings to the convenient
interactive touchscreens. When designing this digital engagement, Kate Spade understood the negatives of purchasing clothing online, such as not
knowing the right size and the purchase not arriving
on time. To create a positive experience, multiple
sizes could be ordered, and a Kate Spade courier
would politely wait for the customer to try on
the clothes and pay for the items she wished to
purchase.
Kate Spade understood that its customers were
increasingly shopping online. By knowing the negatives of online shopping, the company was able to
design a digital channel engagement that allows a
customer to get what she/he wants, when she/he
wants it. Through the use of technology, it was able
to use the benefits of digital shopping (such as
24-hour access) but integrate into the physical
world by making the storefront less about selling
and more about creating an experience, thus giving
shoppers a reason to engage with the company.
3.3. Shaping behavior and motivations #3:
The digital customer experience
Any engagement with a company results in an experience, and whether positive or negative, it will
impact the behavior and motivation to engage with
the company again. Over time, these engagements
will influence attitude, behavior, and meaning relating to the experience and will either result in
positive or negative emotional connections with the
company. The literature has shown that memorable
positive experiences lead to positive behaviors toward a company and in turn loyal customers (Khan,
2012; Mattila, 2001). This area links back to the first
strategy (knowing and aligning your values), as over
time, the engagements made with the customer will
influence their perceptions of the company value.
Research has proven that a customer’s perception of
the investment made by a company in digital engagements can impact the relationship quality and
the customer’s willingness to provide and share
positive company experiences with others (Park &
Kim, 2014). Customer behaviors resulting from the
engagement with digital channels can include liking,
commenting, personalizing, purchasing, or sharing
the experience with others. Understanding the effect of emotions on shaping behavior is an important
aspect of informing the design of the digital channel
and the resulting consequences of the engagement.
This document is authorized for use only by Eric smith in Managerial Economics at Strayer University, 2020.
344
Table 3.
K. Straker, C. Wrigley
Shaping behavior
The digital channel experience involves understanding:
The importance of designing for an emotional experience and not just a functional purchased behavior.
The emotion targeted in the engagement is positive and long-term.
The action and behavior you wish to create is beyond the transactional sale.
The overall experience is a positive and memorable one leading to customer loyalty.
To implement this successfully, designers, marketers, and strategists need to work together and place no
ownership on customer engagements. Behavior has a direct relation to the emotions evoked through the
engagement; therefore, this can only been achieved after the first two areas are successfully achieved. The
digital channel engagement must also translate the company values and address customer needs.
Positive experiences result in relaxed customers,
which in turn results in repeat business, higher
spending rates, and ultimately increased revenues
(Jarach, 2001; see Table 3).
3.3.1. Example #3: Influencing behavior of
Hijack
Meat Pack is a trendy shoe store in Guatemala known
for being edgy and providing unique discounts on
limited edition shoe brands, such as Adidas, Nike,
and Reebok. With over 120,000 likes on its Facebook
page, the store has become an icon for sneaker
lovers. To live up to the expectations of its hardcore
fans, Meat Pack launched the mobile application
Hijack, which uses GPS tracking technology to detect the location of target customers. Building upon
its already highly used mobile application, the store
requires customers to earn their discount. Upon
entering a nearby competitor’s store, a discount
clock is triggered, starting a count down from a
100% discount and dropping by 1% each second, thus
encouraging the customer to leave the competitor
to race to the Meat Pack store as quickly as possible
to receive the highest possible discount. Examples
include a 79% discount for customers who entered
Meat Pack within 20 seconds of the alert being
activated. The application automatically posts the
customer’s successful discount redemption on their
personal Facebook profile. The digital channel engagement saw over 600 people ‘hijacked’ from
competitors’ stores in a week, with the fastest
customer receiving an 89% discount (Brill, 2012).
The success of this engagement lured customers
away from the competitors, not only by giving hefty
price discounts, but also by making customers aware
of the brand via an active digital presence. Hijack
offers a different approach to the traditional discount voucher, which aligns with the company’s
values and targeted customer type (trendy and
edgy). The experience of using the mobile application undoubtedly is fun and a memorable one,
translating to a significant behavior change (running
from a competitor’s store). The long-term effects on
behavior are seen in engagement via other digital
channels, such as Facebook, that has helped in
positively promoting the store through memorable
and fun engagements.
4. Impact and challenges of emotiondriven digital innovation
The impact of digital channel engagements with a
company is facilitated by the emotions evoked and
connections formed throughout the experiences.
Failure to engage customers emotionally may result
in under-performance, loss of competitive advantage, and/or missed opportunities (Wrigley, 2013).
Designing, managing, and continually evolving a
customer’s emotional experience is incredibly complex due to the varying expectations, messages, and
values of not only the customer but also of the
company and the variety of digital channels. Benefits such as financial and competitive advantages
could result from positive experiences due to the
higher user involvement with a digital channel (e.g.,
time spent, number of pages viewed, amount
of personal information revealed) translating into
firm revenue (Trusov, Bodapati, & Bucklin, 2010).
Understanding the company’s value and aligning it
to customers’ emotions is critical to innovating
through digital channels. This research proposes
that innovation requires insights into how and why
customers behave in order to deliver positive digital
engagements. As emotions drive customer behavior,
starting with a clear understanding of the company’s
emotional mission and the value driver of the customer is paramount.
Customer perceptions of the investment made by
a company in the interactivity of digital channels
can impact the relationship quality and customers’
willingness to provide and share positive company
experiences with others (Song & Zinkhan, 2008).
The ability to create engaging interactions with
customers via digital channels can impact company
growth via revenue and the customers’ emotional
This document is authorized for use only by Eric smith in Managerial Economics at Strayer University, 2020.
Designing an emotional strategy: Strengthening digital channel engagements
investment in (advocacy for) the company. This
process requires a combination of creativity, deep
emotional understanding, knowledge of digital behavior, and a strong company-to-customer strategy.
5. Implications and summary
Traditionally, design has been employed by businesses to enhance product development and sales
by creating an artifact or outcome based on marketing research. Only in recent history has the use of
design at an organizational level been investigated
(Brown, 2009; Martin, 2008). However, designers
have always sought to create experiences to foster
positive emotional connections through understanding users and their interactions with a product or
company (Desmet, Overbeeke, & Tax, 2001). This
research aims to provide ways in which the field of
design and emotion can help managers design digital
channel engagements by focusing on delivering online experiences that customers desire from companies.
In these times of digitization, organizations are
required to rethink the traditional concept of customer relationships as new technologies continue to
empower customers. The framework presented leverages the role of design, highlighting opportunities
made possible through digital channels. As this research spans across people, business, and technology, it aims to contribute to the body of knowledge
and processes that will enable companies to engage
with customers emotionally via technology, thereby
building highly engaging customer experiences.
With the ability to impact scholars and practitioners
alike, future research should focus on extending the
theoretical domain of digital channels to include
customer emotional experiences and should require
practitioners to publish best practices and outline
key strategies and tactics with proven results. Fulfilling an emotional experience depends upon the
overall emotional consumption experience, which is
determined not only by the consumption of the
product but also by all engagements with customers
(digital and physical). None of the strategic issues
identified here are solely the responsibility or exclusively the domain of designers. The successful
implementation of these strategies requires input
from a wide variety of functional specialists within
the business.
References
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Belk, R. W. (1988). Possessions and the extended self. Journal of
Consumer Research, 15(2), 139—168.
Brill, M. (2012, July 20). Meat Pack shoe store uses gamification
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Brown, T. (2009). Change by design: How design thinking can
transform organizations. New York: Harper Business.
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burberryplc.com/about_burberry/our_strategy?WT.ac=Our+
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