ROI CASE : "MINECRAFT"

At the moment, it can be found in the world that Enterprise 2.0 helps companies to improve their value in the company such as marketing and sales and also improve communication between businesses and consumers. “While 72 percent of companies use social technologies in some way, very few are anywhere near to achieving the full potential benefit” (McKinsey, 2012). For instance, blogs, Facebooks, Instagram and YouTube used by companies to increase their profits. Consequently, ROI is important to measure how Social technology produce the benefit for company. Owing this, I would like to deliberate about the relationship among ROI and Minecraft Company case on this blog.

The Overview of Minecraft

Minecraft is a sandbox indie game. Minecraft is created by Markus Notch Persson as a Swedish programmer. Mojang is the developer and publisher for Minecraft. On 17 May 2009, Minecraft released for the first time on public. Nowadays, Minecraft is very famous as you can see in this video.

Minecraft popularity doesn’t seem to be fading. Mojang as a publisher has taken in "revenue" exceeding $80 million in their first 15 months since their launched the Game. The profit that the company got it is from Youtube. The game has no tutorial, but every player is able to check a great number of youtube videos players. This profit is approximately $13 million. Based on The Wall Street Journal Report, “Mojang as the developer of Minecraft, saw its profits more than double in 2013, when the studio earned 816 million Swedish kronor ($128 million)”

The Explanation of ROI

ROI stands for Return On Investment. According to Entrepreneur Encyclopedia, ROI is the most common profitability ratio consist of method with divide net profit by total assets. Moreover, “ROI is the earning power of assets measured as the ratio of the net income (profit less depreciation) to the average capital employed (or equity capital) in a company or project.” (Business Dictionary)

As ROI Calculation, I was not able to find a real or exactly details of the number. Owing this, this the assumptions of ROI calculation consists of:

GAIN FROM INVESTMENT	COST OF INVESTMENT
Increased Sales                         = 50% x $100.000 = $ 50.000	Software/Hardware   : $ 40.000
Sales from X-box version                                         = $  2.000	Training                         : $   5.000
Sales from iOS Version                                             = $  3.000	Marketing and Sales Tools :                  : $ 10.000
Sales from Android version                                    =  $  2.000
Sales from Playstation 3 and 4                               = $  5.000
Reductable cost from marketing and sales
(30% x $ 50.000)                                                       = $ 15.000
TOTAL:                               $ 77.000	TOTAL:      $55.000

ROI = ( 77.000 – 55.000 ) X 100 = 40 %

    55.000

The Benefits of ROI
 

"Intangible"

Social Media such as YouTube is a greater way for increase customer engagement and customer satisfaction. In addition, for players is easier to adapt the way of playing Minecraft from YouTube videos. Moreover, new information and skills in marketing techniques through social media could be adapted by employees.

"Tangible"

Social Media increased profit according on sales and marketing driven. Furthermore, the company saw a great number of revenue for them by social Media.

 
The Strength and the Weakness of ROI

ROI have a few strengths for this case such as reducing money or equity for marketing and sales necessary. Moreover, ROI is able to calculate the exactly number of profit and revenue as a tangible benefit clearly described. In addition, ROI is able to imprisonment intangible benefits as well.

On the other hand, Minecraft Company did not usage a few kinds of social technologies. This is a weakness of ROI from Minecraft Company.

 

-MEL-

Reference

Newman, A., Thomas, J., & Ebrary. (2009). Enterprise 2.0 implementation. New York: McGraw-Hill.

MISUSE OF SOCIAL MEDIA: DOMINO'S PIZZA

The use of social media is significantly increasing on business purposes. Social media such as Twitter, Youtube, Facebook, Linkedin, and Instagram becomes the most effective way for business to attract customers’ attention and build a good company image. Thus, there is no doubt about the power of social media on business of marketing.

 

Social Media Marketing Trends For 2014

 

                                     

The growth of social media marketing does not always give positive impacts to business, but sometimes it leads to negative impacts when misuse of social media happens in workplace. For example, Domino’s Pizza.

Domino’s Pizza is American restaurant and the second largest with pizza as a main dish in United State. Domino’s is also the largest pizza chain worldwide with more than 10,000 stores in 73 countries. Domino’s is founded in 1960.      

 

 

Domino’s Pizza – Employees Misuse of Social Media

In 2009, Domino's employees fired for prank. They made a humorous video that shows how they messed and played with customers food and uploaded to Youtube. Furthermore, this topic also had spread via Twitter. Consequently, they ended up in the jail and Domino’s spent many years to remove the video from social media as well as recovered Domino’s reputation, so customers could trust them again.

                                          

Domino’s Pizza – Customers Misuse of Social Media

In 2014, Australian teenager, Tyson Williams made a prank video and uploaded to Youtube. He called and placed order in first Domino’s Pizza restaurant, then put it on hold, so he could call the second Domino’s restaurant and he activated a conference call. Therefore, both of Domino’s employees who received the call was confused. Because of that prank call, Domino’s Pizza was chaos.

 

The Key Issue and The Consequences

The main problem of Domino's is lack of control. Domino's is failed to control and recognise its own employee. Therefore, they can easily breach their obligation as employee because of that, social media misuse happened. the risk of social media for business purposes has increased, such as social media misuse in workplace. The misuse of social media can ruin company business and may lead to bankrupt. It can be seen from Domino’s Pizza case. Because of its employees, Domino’s has to spend a lot of money to move the video off from social media. In addition, Domino’s reputation is questioned. So, it may lead to customers will not trust Domino’s anymore and loss for Domino’s. On the other hand, the employees who made a humorous video had to face criminal charges and Domino’s fired them. Lastly, because of the prank call from Tyson, the productivity of Domino’s employees is not effective.

 

Why was this unethical?

 

In this case, Domino's workers were unethical. Those workers have failed the principle of due care and social cost on eight ethical principal which is written by Rogerson and Fidlers. It simply means that the employees already accepted their obligations to provide the best services and pizza for customers, but they messed up with customers food and uploaded to Youtube.

 

 

How to avoid Misuse of Social Media?

 

There are several ways to avoid the social media misuse for Domino’s Pizza. Firstly, Domino’s has to make clear policies and rules about smartphone or tablet usage in workplace. Secondly, training employees to reduce risk, especially social media training. Thirdly, managers or supervisors have to supervise their staff at work, so the workers can work more effective and efficient. Fourthly, hire someone who is expert in social media to keep monitoring Domino’s website and report directly if there is a problem that relates to Domino’s image, so they can solve the issue immediately.

 

 

                                                                                                                                                 -MEL-

 

 

Reference

Rogerson, S., & Fidler, C. (n.d.). A practical perspective on information ethics. Retrieved from https://www.academia.edu/322961/A_Practical_Perspective_of_Information_Ethics. 

H&M : Image & Products with Social Media!

 

H&M stands for H & M Hennes & Mauritz AB. Erling Persson is a founder of H&M company in 1946 and established his first shop which name Västerås, Sweden "Hennes” (means; for her and/or hers) in 1947. In 1948, Erling Persson collaborate with Mauritz Widforss and the name of shop changed from “Hennes” to “Hennes & Mauritz” (H&M).

H&M is a multinational retail-clothing company for women, men, teenagers and kids. H&M is a Swedish company with “controls the steps of production, from merchandise planning to establishing specifications, and production is outsourced to approximately 800 factories in Europe and Asia.” (Wikipedia, 2014). There are a great number of the H&M companies in 53 countries and 2,325 stores around the world. H&M is the second largest global clothing retailer behind Inditex (Zara).

According to “McKinsey Global Institute in 2012”, H&M company use Social Technology and Media for marketing and sales development and interaction with customers to build customers service.

H&M Company established a few social media for entering online media world such as Website, Facebook Fans Page, Instagram, Pinterest and Twitter. Based on Marketing and Sales Development, customers be able to find out the newest and latest products, sale and promotion, news and career in those social media. Consequently, customers are able to increase their time management in shopping. They do not have to go to the store, they can buy directly from the website.

Official Website

Twitter

Moreover, H&M entered the online media such as YouTube for advertising platform to develop their sales, marketing and products. Such as advertisement for upcoming products "SPRING Women 2014".

 

http://youtu.be/VDsLMLjVsD8

Because of social Media, H&M is increasing their customer’s services. In twitter and Instagram, customer is able to ultimately communicate with company for what they feel, what they want, and what kind of advice that could be benefit for company. For example, customers posts some comments and photos about H&M products. Owing this, it easier for the company to escalation to improve their product with interaction between company and customers for company successfully.

 

 

                                                                                                                                                         -MEL-

 

 

 

References

 

McKinsey (2013). The social economy: Unlocking value and productivity through social technologies.

 

http://www.mckinsey.com/insights/high_tech_telecoms_internet/the_social_economy

 

http://en.wikipedia.org/wiki/H%26M