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Target Data Breach Exposes Risks to Businesses

By APICS staff | 14 | 3 | February 04, 2014
Representatives at Target say the data breach that resulted in the theft of 40 million credit and debit card numbers was caused by credentials that were stolen from a vendor, the Wall Street Journal reports. This underscores the risks faced by any company that operates through large, interconnected systems.

Target has many different platforms that various parties can access, says Molly Snyder, a spokesperson for the company. However, the company refuses to say exactly which system resulted in the stolen credentials or how the offense was accomplished. While the investigation proceeds, Target has limited access to some of its computer systems.

An FBI report says that in the past year, the organization has identified about 20 different online attacks similar to the one that hit Target. The bureau warns retailers that these types of threats are only likely to increase. "We believe [point-of-sale] malware crime will continue to grow over the near term despite law enforcement and security firms' actions to mitigate it," the report reads.

H&M: Sustainability and Worker Ethics Are Key Issues

Hennes & Mauritz, better known as H&M, is the world's second-largest fashion retailer. While part of its mission is to sell clothing that won't break the budget, as Reuters reports, leaders believe that helping the environment and improving working conditions at suppliers shouldn't contradict that mission.

"What hurts H&M is an assumption that they must be exploiting their workers because they produce cheap clothes," says Joachim Schoepfer of Serviceplan, a research firm that reports on companies' images. H&M's customers, which include many young people, are beginning to become critical of the use of labor at the cheapest price point. Last year, the business even slipped to second-to-last place in perceived sustainability in Germany, its biggest market.

However, this is based on faulty assumptions, says Helena Helmersson, head of sustainability at H&M. "There is a misconception that lower prices in the stores mean bad working conditions or less pay." The company is lobbying Bangladesh and Cambodia, its biggest suppliers, to change laws to pay a fair living wage to its 850,000 textile workers. "We don't aim for sustainability to be a luxury thing," Helmersson says.

Propane Shortage Drags On

Propane shortages are expected to continue well into February, as leaders in many US states are calling for new ways to ease the crunch, Reuters reports. Potential solutions include offering relief to the hardest-hit consumers in the form of cash, extending waivers on road restrictions, and warning propane suppliers against price-gouging and taking advantage of consumers.

In Mont Belvieu, Texas, there is a two-day wait for trucks to stock up on propane at storage facilities. However, the Texas supply is plugging gaps elsewhere in the country. According to US Secretary of Energy Ernest Mortiz, the shortages are the result of a "perfect storm" of unusually high demand to dry out corn after a late harvest. Experts say that record-high exports also contributed to the crisis, depleting inventories ahead of winter.

"Rural Oklahomans rely on propane to warm their homes and support their livelihoods," says Senator James Lockhart. "I can assure you that our low-income citizens and the elderly believe this propane shortage is an emergency." Propane prices in parts of the Midwest have more than doubled since the start of the year-$5 a gallon in some locations.

Four Strategies to Outthink the Competition

Savvy executives and managers are trying to find ways to gain a competitive edge without resorting to an out-and-out fight. Entrepreneur offers the following four strategies to consider when trying to outthink, rather than outfight, the competition.

  1. Explore the latest marketing techniques. It’s important to find the most cost-effective way to advertise. Google search ads once were cheap and drove high-quality traffic; then this shifted to mobile advertising. Now, both of these are becoming less valuable. Street teams and guerrilla marketing are two inexpensive ways to differentiate your brand.
  2. Consider low-cost suppliers. According to Entrepreneur, Ikea first pioneered the low-cost manufacturing approach by moving manufacturing from Sweden to Poland, and now most manufacturing is a global effort. There still are ways to harness an advantage by finding the lowest-cost providers, but this takes time, effort, and energy.
  3. Take brand risks. Follow the example of Virgin Group, whose chair, Richard Branson, once tried to sail around the world in a hot-air balloon. While he was unsuccessful, it put his company in the limelight.
  4. Seek out the biggest challenges. Look for the problems that others are avoiding and try to solve them. Before Apple came along with the iPhone, it was widely believed that a touchscreen-only device was an impossibility. Master challenges like this, and your organization will become invaluable in the eyes of your customers.

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