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Aeromexico vs. Interjet

In highly competitive industries, companies allocate resources specifically to monitor the competition, their strategies and, of course, their weaknesses. It is common that the losses of a company are translated into profits for another. Therefore, a differentiation strategy is key to be present in the minds of consumers, attract new customers and earn their loyalty. The aeronautical industry and -particularly- commercial aviation is a clear example.

To compete, airlines tend to wage price wars. That is, they carry out promotions campaigns so that consumers buy them because they are the option with the lowest price. This increases customer acquisition, but makes it difficult to serve the customer with amenities for their trip. Instead of competing on price, Interjet sought to differentiate itself by competing in quality. The strategy was thought to excel in a market that is constantly criticized for failing to satisfy the customer in order to present itself as the cheapest option.

However, in practice, this strategy proved detrimental since small factors such as delays in flight itineraries, peaks in demand due to the proximity of vacations and the lack of crew due to delays in negotiating their working conditions, did not allow the fulfillment of the promise of quality. These factors are considered “small” because they present problems that airlines are used to dealing with. However, when they took place at the same time, they made Interjet to cancel more than 30 flights. The Federal Consumer Procurator’s Office took action on the matter, resulting in the return of money to more than 5,400 passengers. Several airlines took the opportunity to benefit from this circumstance and sought to capture the customers who were affected by Interjet, Aeromexico was among them.

The cancellation of flights allowed Aeromexico to design a marketing strategy that captured that market affected by Interjet. At the time that social networks were flooded with complaints against this last airline, Aeromexico launched a 25% discount “if your flight from another airline was canceled.”

This is a case that shows that permanent risk monitoring can be key for companies to take advantage of windows of opportunity that open up from specific circumstances. On the other hand, it also reflects that risk management is a key element to mitigate crises or make an adequate containment of damages.

Which are the risks for BBVA in rebranding its subsidiaries?

The main objective of rebranding is to change the perception of your brand in front of the public, seeking a differentiation from your competitors and at the same time be relevant for your audience. With a new global positioning strategy, BBVA announced the unification of its brand throughout the world, which is why “Bancomer” is eliminated within the subsidiary in Mexico. The Spanish giant made the announcement of the unification, as well as a change of logo, and reiterated its commitment to the digitization of financial services.

“In a world where digitalization and globalization are already a reality, the customer experience is the most important factor for the success of any company. BBVA has been a pioneer in its commitment to digitalization and in seeking solutions that help customers make the best decisions in their lives and businesses “said Carlos Torre Vila, president of BBVA. Thus, with the name BBVA the group will be known all over the world.

For this reason, local designations will be eliminated in the coming months: the term “French” in Argentina; “Compass”, in the United States; “Bancomer” in Mexico and “Continental” in Peru. Garanti, the group’s Turkish franchise, will switch to Garanti BBVA. In Mexico, the Bancomer brand is almost 90 years old, which means that the brand is rooted among the population. In this sense, the transition to BBVA should be a smooth process, with efficient communication towards employees and customers. “They have to be very careful, because the Bancomer brand is a very important equity in Mexico. When people tell you what their bank is, they tell you: Bancomer “says Isabel Blasco, director of Interbrand Mexico.

According to specialists, it is expected that there will be initial confusion regarding the name of the bank for the clients, so the external communication has to be very well taken care of where it is mentioned that they are still the bank of always and the money of its users does not run any risk. However, although a rebranding strategy can be a good resource to integrate into the global market, the competition can take advantage of any mistake to capitalize on the situation and try to win more customers. Some experts believe that Banorte can benefit from the rebranding of BBVA Bancomer by being known as one of the few Mexican banks.

 

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SYRINGES IN PEPSI CANS?

In 1993, a couple in Washington denounced Pepsi to local authorities for allegedly finding a syringe in a soda can. The next day, another case was reported the same, so the Food and Drug Administration (FDA) issued a statement alerting consumers in the region to take precautions when buying soft drinks that came from the bottling company contracted by Pepsi. The directors of Pepsi, totally sure that the reports were false, asked the leaders of the bottling company to declare before the media the impossibility of intervening in the bottling process of the soft drinks.
However, during the week following the complaint, reports began to arrive at Pepsi offices about similar cases, this time in distant cities. And it was at that moment that Pepsi joined a response team, consisting of twelve managers, to take care of the crisis that was unfolding.
Pepsi’s response was to post the security video of a Colorado store that showed a woman placing a syringe in a tin behind the back of one of the employees. At the same time, they published a report explaining the bottling process. The strategy consisted in presenting two simultaneous defenses. One, the corporate report, to demonstrate that there was no adulteration in the production phase; another, the security video, to verify that the external objects were placed by people after the cans were opened and that they were only looking to discredit the brand or, simply, make a bad joke. Shortly thereafter, the Pepsi CEO and the FDA Commissioner jointly announced that there was no risk in drinking Pepsi products.
It should be mentioned that, prior to the joint statement, the FDA announced in the media the arrest of an individual for presenting false claims, emphasizing that this act, being a federal crime, had a penalty of five years in prison and a fine of $ 250,000. . Since this announcement was issued prior to the joint statement, it can be inferred that Pepsi urged the FDA to issue this announcement as part of its damage control strategy.
The FDA also issued notices announcing that no supermarket was withdrawing Pepsi products, which helped build trust in smaller stores and-thus mitigate losses at the distributors’ level. Having the backing of the FDA, the government body that handled the cases initially, Pepsi’s defense gained greater strength.
In parallel, the central offices sent daily reports on the state of the crisis to its 600 offices, distribution centers and bottling plants throughout the United States. The reports included response protocols to assure clients and suppliers that the drinks were safe.
Once the crisis was mitigated, thanks in large part to the video from the Colorado store, Pepsi paid advertising space in national newspapers to announce its “victory” and to thank consumers who remained loyal to the brand. The ad read: “Pepsi is pleased to announce … nothing. […] As the United States knows now, those stories about Diet Pepsi were a hoax. Hundreds of investigators did not find evidence to support a single claim … [Thank you] to the millions who accompanied us. ” And although a drop in Pepsi shares of 2% was reported, this company recovered in less than a month thanks to its rapid response, its communication strategy and coordination with federal government authorities.

Write to info@riesgospoliticos.com.mx to help your company have effective crisis management mechanisms.

 

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The risks of losing internet neutrality

The growth of the internet within modern society has no parallel in the history of mankind. The internet has brought great opportunities for our daily life, world trade, the development of technologies, and has modified the behavior of society; thus, being connected also brings challenges and new threats to society.
In the first place, we had to learn to deal with the phenomenon. As is known, legal reforms are not always going at the speed of changes in society. For example, the low regulation of these services allowed the creation of monopolies, as happened in the 1990s in the USA. UU., Where AT & T became the only internet provider. The US government reacted by regulating the provision of Internet services with the Telecommunications Law of 1996, whose purpose was to prevent the appearance of new monopolies and encourage competition.
On the other hand, a whole new range of criminal activities that operate through the Internet have been opened, such as the increase of illegal child pornography networks, the theft of information and identity, cyber attacks against private and public companies, among others. These crimes, without doubt, represent major challenges for governments around the world. The debate that has opened, on the one hand, these new criminal behaviors, and, on the other, the development of new businesses, such as the companies of the Fintech sector, is the subject of Internet regulation. To what extent do the limits of the users and where should the State supervise its use?
The current discussion on internet regulation focuses on whether all data traffic that goes through the network indiscriminately should be treated; without charging users a fee depending on the content, web page, platform or application used. This is known as internet neutrality. However, not everyone is in favor of this neutrality.
In Mexico, the Federal Telecommunications Law states that companies that provide Internet access services must be guided by the principles of free choice, non-discrimination, privacy, transparency and information, traffic management, quality, sustained development of infrastructure, and Companies must provide the Internet service respecting the agreement with the user regardless of the content, origin, terminal destination or application. In this way, the neutrality of the internet was protected.
In the USA On the other hand, there is no such neutrality. Since 2017, the Federal Communications Commission (FCC) announced the repeal of the neutrality rules. This gives freedom to the companies that provide the service to experiment with new prices, prioritize, or block content without having to render accounts to users. Some of the consequences do not fall directly on users, but are reflected in online services, for example, in e-commerce or streaming services.
It is worth remembering in the Mexico-United States-Canada Treaty (T-MEC) that could replace NAFTA, there is a chapter of digital regulations, where rules are established in terms of electronic commerce, intellectual property in the digital world, and regulations in telecommunications. The experts, however, affirm that autonomy and sovereignty over the neutrality of the network in the three countries will be maintained.

If your business depends on the internet to operate, you need to be aware of the international regulations on the matter. We can help you, write to info@riesgospoliticos.com.mx.

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VIDEO GAMES, MUCH MORE THAN SIMPLE ENTERTAINMENT

Video games have been part of our culture for some time, either by the avid players deeply immersed in these trends, always aware of a new console and games, or those who download games on their cell phone to kill some minutes while performing some other activity. Over the years, since the appearance of these games, the world has been influenced with this entertainment tool that has undoubtedly generated great profits for its creators.

It can be said that the videogame industry is today one of the most risky, since millions of dollars can be invested without any guarantee of return, as in the case of the Wii U Nintendo console, which did not even come close to the expected sales. by the company, generating millions of dollars in losses. In contrast, about 265 MDD were invested in developing the Grand Theft Auto V game        (known as GTA V); by mid-2018, close to 90 million copies had been sold, generating profits of around 6 MMDD. Derived from this, it is understood that the video game industry can be compared with the film industry, in the sense that they get to invest large amounts of money in generating the most attractive product of the moment, but there is a risk of not being well received. by the public and lose all the resources invested in its preparation.

The most successful companies in the development of the most popular video games have a particular business model, which makes use of seed capital to develop research in new technologies. Such is the case of companies like Nintendo, Sony and Microsoft, which every so often release new consoles with better graphics and quality in the games. The main characteristic of these digital products is that they are expensive to create in the first instance, hence the large outlay in research. But once the technology is developed, it is virtually free to reproduce millions of copies based on the results of the research, according to the economics professor at the London School. of Economics , Danny Quah .

No doubt there are other alternative models, as demonstrated by the wave of downloadable content on mobile phones. In this sense, there are audiences that are interested in playing but that do not give as much importance to innovations in graphics and interfaces. Such was the case of Flappy Bird , a game that cost around $ 300 and came to generate 18 MDD a year during the time he stayed at the head of the most popular applications for cell phones.   

Leaving aside the financial issue, our culture has been influenced by video games for more than 30 years. Since tennis appeared  for Two , characters like Donkey Kong, Sonic the Hedgehog , and Pokémon have emerged that have become mascots and cultural icons since the nineties. Thus, between consoles, games, online multiplayer and virtual reality, nearly seven generations of video games have been developed, each with greater penetration and generating more followers. 

It is clear that an industry with such a level of impact on the daily life of people also has effects in the political sphere. For example, the 1979 Revolution game inspired by the Iranian Revolution, was cataloged as a propagandist, prompting the Iranian government to accuse one of its espionage developers. In addition to simply entertaining, they are also elaborated in order to address issues that are uncomfortable for society. Such was the case of Papers , Please , a game that focuses on showing the emotional burden of working as a customs inspector, or Oiligarchy, where the goal is to become a millionaire by destroying the environment and bribing politicians while an oil company is operating.         

Regardless of the opinions for or against these platforms, you can not deny the importance that videogames are having in society, either as a simple means of entertainment or as a tool for disseminating ideas. In this sense, the accumulation of financial power, cultural influence and even politics will give something to talk about in the near future.

 

Are you interested in how the development of certain technologies impacts the sector where your organization operates? Contact us at info@riesgospoliticos.com.mx to give you the advice you need.

 

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