Nadia Gonzaga's Blog

The United Nations is an international organization that focuses on large scale issues worldwide. These include: “maintaining international peace and security, promoting social progress, better living standards and human rights.” The actual work the UN specializes in include the following: “sustainable development, protection of the environment and refugees, disaster relief and mitigation, and counter terrorism.” Clearly, the UN aims to touch on a variety of big goals. But because the UN spans a world so big, I think it would be extremely difficult for the organization to narrow in on specific problems that certain individuals face. Obviously, one main UN goal is to eradicate poverty, which affects much of the population in Africa. This issue applies to a great multitude of people, so the UN desires to achieve this goal. The organization will try to eliminate poverty through a variety of methods. However, I do not believe that the UN can specifically focus on improving African businesses to fulfill their aim. That is where Arc and social enterprise come in.

The Arc, among other social enterprise groups, want to improve the economy by working within the community to “develop business management and leadership capacity.” By collaborating with entrepreneurs in Africa and other developing countries, Arc members can impart knowledge and help train the entrepreneurs to improve their business and address problems in the most efficient way. Fitih Tesfaye is a prime example of an entrepreneur that applied the suggestions she learned at an Arc workshop to her own business in Ethiopia. She now receives a higher income and is now above the poverty line. The UN cannot zero in on aspects such as these. Thus, the need for social enterprises to attend to developing businesses is crucial to further strengthen the economy and improve the lives of individuals.

I believe this situation can appropriately be compared to running a business. If you owned a large, growing company, you would not want to be the only person running the entire business. All your time would be divided and it would be impossible to solve all the issues the company faces in each department, say for example: marketing, finance, or operations. It would be wise to establish managers to supervise those departments so they can attend to their own issues and alleviate the load. The UN can be likened to that one owner. It would be impossible for that one body to look over every single global problem. But smaller initiatives such as the Arc can focus on the issues the UN cannot directly touch on. This divides out the total work and directly improves a certain issue that a majority of people face. The population’s needs can be solved quicker and in the long run, the efforts of the social enterprise groups will contribute to some of the UN’s ultimate goals.

References

Kroeker, Jeff. “In a Crowded Market, Entrepreneur Finds a Sweet Way to Stand out.” The Globe and Mail. The Globe and Mail Inc., 11 Apr. 2014. Web. 13 Nov. 2014. <http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/going-global/in-a-crowded-market-ethiopian-entrepreneur-finds-a-sweet-way-to-stand-out/article17912688/>

“The Arc Initiative.” Sauder School of Business. UBC, 7 Oct. 2014. Web. 13 Nov. 2014. <http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative>

“What We Do.” UN Careers. United Nations, n.d. Web. 13 Nov. 2014. <https://careers.un.org/lbw/home.aspx?viewtype=WWD>

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The Arc Initiative Logo. Digital image. Sauder School of Business. UBC, 7 Oct. 2014. Web. 12 Nov. 2014. <http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative>

United Nations Logo. Digital image. Detroit Water Brigade. Detroit Water Brigade, 21 Oct. 2014. Web. 12 Nov. 2014. <http://detroitwaterbrigade.org/un-detroits-water-shut-offs-target-poor-vulnerable-african-americans/>

I thought Professor Michael Roberto’s blog post on entrepreneurs was quite intriguing. His post was based off of an article by The Wall Street Journal that focused on analyzing the question: are entrepreneurs really different from the rest of us?

Professor Roberto pointed out that conventional wisdom says that entrepreneurs are different from everyone else. Why? Entrepreneurs are creative, daring, risk-seekers, ambitious, and are not afraid to make mistakes or fail. We make be inclined to believe that entrepreneurs are way different and better people than the average person. However, the article highlights that there is a major problem with the notion of conventional wisdom: “There is no direct evidence to support it and some solid research to suggest it isn’t true.”

Some questions Roberto raised are: Why has this conventional wisdom dominated our thinking about entrepreneurs for so long? And  why do we believe that entrepreneurs have a different make-up than the rest of us?

In Class 14 on innovation and entrepreneurship, we learned that good entrepreneurs are born with certain traits in addition to the few mentioned above. These include aggressiveness, curiosity, and intelligence. This perspective of entrepreneur characteristics is adopted by plenty, myself included. To me, entrepreneurs always seem very outgoing, lively, and definitely daring. But I disagree with the idea that all entrepreneurs are born with these traits. In contrast, I believe that these traits can be developed as one matures as a businessperson. Individuals can learn so much and develop and strengthen many qualities through training to help them become better in business. I honestly do not think that you have to be naturally gifted with these traits to be prosperous. But why do we believe that entrepreneurs have a different make-up than the rest of us? It is because society bases its ideas on what is seen. People look at the resulting success that famous entrepreneurs have, such as Bill Gates, and develop their perceptions off of them.  People just accept the end results of an entrepreneur’s success and believe that such a level of achievement is unattainable for them. Why has this conventional wisdom dominated people’s thinking about entrepreneurs for so long? I suppose it is because no one dares to question the conventional thinking anyway, even though there is no direct evidence to prove it.

So are entrepreneurs really different than us? I do not think so. Although entrepreneurship requires one to be seriously ambitious and risky, I believe any person can achieve that if they choose to. Plus, it is just our perception of entrepreneurs based on their success and disposition that seemingly places them in a spot above the average individual.

References

Cappelli, Peter, and Laura Huang. “Are Entrepreneurs Different Than the Rest of Us?” The Wall Street Journal. Dow Jones & Company, 3 Nov. 2014. Web. 05 Nov. 2014. <http://online.wsj.com/articles/are-entrepreneurs-really-different-than-the-rest-of-us-1414965289>

Roberto, Michael. “Entrepreneurs: Are They Truly Different Than Others?”Professor Michael Roberto’s Blog. Blogger, 3 Nov. 2013. Web. 05 Nov. 2014. <http://michael-roberto.blogspot.ca/2014/11/entrepreneurs-are-they-truly-different.html>

Y Combinator. “Startup School 2014 Recap and Videos.” Y Combinator Posthaven. Posthaven, 14 Oct. 2014. Web. 05 Nov. 2014. <http://blog.ycombinator.com/startup-school-2014-recap-and-videos>

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Porat, Shawn. Entrepreneurs. Digital image. Entrepreneur Radio. Entrepreneurs Workshop, LLC, n.d. Web. 5 Nov. 2014. <http://www.entrepreneurradio.org/10-business-leaders-entrepreneurs-follow/>

Professor Michael Roberto. Digital image. Professor Michael Roberto’s Blog. Blogger, n.d. Web. 5 Nov. 2014.

I found Brian Wei Gonce’s blog post on Nike’s Appeal to Women particularly interesting because it highlighted the importance of segmenting to a certain audience and having good positioning. Nike has ventured into the female athletic-clothing industry and has witnessed an great increase in sales. According to the blog, “Nike has realized the importance of broadening their audience to…target [women].” Other companies, such as Adidas and Reebok are also following suit and are fabricating advertisements targeting women. Brian also mentioned how Lululemon’s focus on women is becoming more prevalent. What makes Lululemon position different from Nike’s is that the company started off revolving around female apparel instead of male. In contrast to Nike, I wanted to find out how Lululemon is currently appealing to the male market.

According to an article by Bloomberg, Lululemon plans to open standalone men’s stores by 2016. And as of this year, sales for menswear have increased by 5%. Although most men are not active enthusiasts of yoga, which is the physical activity the company bases its apparel, Lululemon offers running gear which has appealed to many more men than women.

I think that venturing into such a market was a good move for Lululemon. Back then, whenever I saw a man wearing Lululemon sweatpants I would make a big deal out of it because I thought it was weird. But now, understanding why men would purchase the gear because of the good quality and observing how successful sales are, Lululemon made the right choice in creating men’s clothing. When the announcement of men’s standalone stores first came out, a big challenge according to Business Insider was the brand perception. Lululemon is obviously more female inclined and the men’s section in every store is minimal relative to the women’s section. This has possibly deterred men from even entering the store and making their way to the men’s area. However, these standalone stores should appeal to men since they will be completely filled with menswear. Making the expansion can definitely strengthen Lululemon’s diversity in the market.

References

Kell, John. “Lululemon Is Striking a Stronger Pose With men.” Fortune. Time Inc., 12 Sept. 2014. Web. 05 Nov. 2014. <http://fortune.com/2014/09/12/lululemon-men-sales/>

Lutz, Ashley. “6 Reasons Men Don’t Want To Wear Lululemon.” Business Insider. Business Insider, Inc., 13 June 2013. Web. 5 Nov. 2014. <http://www.businessinsider.com/lululemon-opening-mens-stores-2013-6>

Rupp, Lindsey. “Lululemon Plans Men’s Stores by 2016 in Bid to Maintain Growth.” Bloomberg. Bloomberg L.P., 13 June 2013. Web. 05 Nov. 2014. <http://www.bloomberg.com/news/2013-06-13/lululemon-plans-men-s-stores-by-2016-in-bid-to-maintain-growth.html>

Wei Gonce, Brian. “NIKE’S APPEAL TO WOMEN.” Brian Wei Gonce’s Blog. WordPress, 27 Sept. 2014. Web. 05 Nov. 2014. <https://blogs.ubc.ca/brianweigonce/2014/09/27/nikes-appeal-to-women/>

Images

Carter, Lisa. Lululemon Athletica Inc. plans to expand its global markets in 2013 and beyond. Digital image. Medill. Medill Reports, 20 Mar. 2013. Web. 5 Nov. 2014. <http://news.medill.northwestern.edu/chicago/news.aspx?id=219239>

Villagomez, Andrew. Lululemon Menswear. Digital image. Askmen. N.p., 26 Aug. 2014. Web. 5 Nov. 2014. <http://ca.askmen.com/fashion/trends/lululemon-menswear.html>

Class 15 focused on the corporate social responsibility to create shared value and to maintain sustainability. Because I could not easily think of a business that could create a shared value off the top of my head, I decided to do some research on shared value examples and interestingly, this is what I found:

• Kirin Co. is a Japanese food and beverage business that sells the country’s most popular beers. However, a social concern is raised as to how this company deals with drunk driving accidents. Because drunk driving is strictly prohibited, the company has developed the world’s first non-alcoholic beer, KIRIN FREE, released in 2009. The beverage tastes like beer except it contains no alcohol, which allows consumption for anyone at any place and time who simply want a taste of beer.

• Novartis is a Swiss pharmaceutical company that saw the opportunity to sell their pharmaceuticals in rural India. They observed that there was a lack of health-seeking behaviour, health-care providers had no health training, and there was a poor supply chain for thousands of local clinics. Taking action, Novartis hired community health educators, provided training camps for the health-care providers, and created a distribution system to 50,000 clinics.

I think that these are excellent examples of companies creating a shared value. Both companies address social concerns affecting their market, yet they expand their competitiveness, enter new markets and increase profits at the same time. For Kirin, the KIRIN FREE beverage can prevent drunk driving and allows entrance into a different market, a non-alcoholic one. For Novartis, the company clearly expanded its market and allowed the opportunity for 42 million people in India to receive greatly improved healthcare.

Since obesity is an increasing social epidemic, fast food chains like Burger King can promote healthier foods. Consumers are not inclined to purchase salads at these chains because a bowl of lettuce is more expensive than the typical burger, fries, and pop combo. Instead of putting fries as a side to any combo, the business should change the side to a salad. They should display the salad as a part of the combo on the actual visual menu. This should push consumers to just go with what is displayed and eat the salad. The point of a shared value is to do good, and companies can surely do good by promoting healthier choices to combat obesity.

References

Ennes, Meghan. “Interview: CEO of Japan’s Kirin Brewery on Creating Shared Value.” Triple Pundit. TriplePundit, 24 Feb. 2014. Web. 24 Oct. 2014. <http://www.triplepundit.com/2014/02/interview-ceo-japans-popular-brewery-creating-shared-value-society/>

Kramer, Mark. “Better Ways of Doing Business: Creating Shared Value.” The Guardian. Guardian News and Media Limited, 25 Apr. 2012. Web. 24 Oct. 2014. <http%3A%2F%2Fwww.theguardian.com%2Fsustainable-business%2Fblog%2Fcreating-shared-value-social-progress-profit>

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DAJF. Kirin Free non-alcoholic beer (350 ml can). Digital image. Wikipedia. Wikipedia, 19 Oct. 2012. Web. 24 Oct. 2014. <http://en.wikipedia.org/wiki/File:Kirin_Free.JPG>

Isben, David. Burger King. Digital image. Five Thot. Five Thot, 29 Mar. 2012. Web. 24 Oct. 2014. <http://www.getthefive.com/articles/the-boardroom/a-whopper-of-a-new-idea-at-burger-king-salads-wrap/>

PTI. Receptionists at Work at Novartis India. Digital image. Business Standard. Business Standard Ltd., n.d. Web. 24 Oct. 2014. <http://www.business-standard.com/photo-gallery/general/receptionists-at-work-at-novartis-india-709.htm>

The Vancouver Canucks have recently started the 2014-2015 season and fans are all wondering how their performance will play out. The past few years have not been the best for the team; firing the head coach after two consecutive first round playoff exits, trading our only hopes in the team – the two goalies, and hiring a tyrannical, hot-tempered coach who led absolutely the worst regular season in all of Canucks history. It is upsetting that a lot of the “fans” are simply bandwagoners. And last year, because of the team’s poor performance, people stopped watching, stopped supporting, and basically lost all hope. Many businesses experienced the negative effects of last season’s disaster. Sales for Canucks apparel decreased, sales for the games themselves also withered, and restaurants and bars that usually play the games on their TV screens suffered a loss in revenue.

This time around, local businesses are expecting a successful season that will hopefully bring fans back together again. With new changes to the organization, businesses owners are looking forward to the team’s spot in the playoffs. As one gastropub owner stated: “People spend money on beer and food when they are in the playoffs. When the team does well, people spend more.”

I sincerely believe that the changes made in the past few months will actually result in a successful season. The team has obtained skilled, young players, and have sorted out management. I am also really happy for the businesses that could benefit from a result of a good performance. And I want these businesses to thrive because they provide great service and ambiance during the games. Having passionate fans in the same room watching the same big screens ultimately add to the awesomeness of the whole experience. Last year, I stopped going to Boston Pizza to watch games because of the losing season. However, just three games in and I have already made plans to see a December game at a local restaurant. Once the Canucks do well, businesses will start to see an increase in revenue as more people will want to watch games, show their support, and simply have a good time. The playoffs will be a real revenue hauler for food companies and we can only hope that the Canucks will make it that far.

References

Colebourn, John. “Successful Season for Canucks Would Be a Big plus for Local Businesses.” The Province. Postmedia Network Inc., 8 Oct. 2014. Web. 18 Oct. 2014. <http://www.theprovince.com/news/Successful+season+Canucks+would+plus+local+businesses/10271155/story.html>

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Hayward, Jonathan. Vancouver Canucks fans watch the final minute of the third period of NHL action against the Anaheim Ducks in Vancouver, Monday, April 7, 2014. Digital image. National Post. National Post, 11 Apr. 2014. Web. 18 Oct. 2014. <http://sports.nationalpost.com/2014/04/10/new-canucks-president-trevor-linden-has-inherited-a-fine-mess-in-vancouver/>

A large section of the Chilcotin region of B.C. has been declared as a new tribal park. The boundaries will include New Prosperity mine and Taseko Mines Ltd. at Fish Lake. According to the Tsilhqot’in, “the tribal park would cover about 3,120 square kilometres and protect cultural, heritage and ecological values.”

For New Prosperity mine, this park may present issues for their various upcoming projects. New Prosperity, for many years, has worked to develop a gold-copper mine in the Chilcotin area. Although facing federal government rejection twice, New Prosperity has been approved of their project redesign and were set to move forward with their plan. However, the rules of the new park allow otherwise. In an effort to conserve and protect the environment, “large-scale industrial mining and clear-cut logging would not be allowed in the tribal park.” For New Prosperity, this means that their project is halted. 

I believe that the tribal park will have a positive effect on the environment and will do wonders in preserving Aboriginal culture and heritage. Although I believe these factors are important to address, there is a great economic loss that results in the new boundaries. New Prosperity mining has the potential for “large-scale economic value” and the termination of this project is a waste of all the resources and efforts put into it. There were previous concerns with the damaging affects of mining in the area, but the company has addressed the concerns surrounding Fish Lake and has passed all the environmental requirements. If the government minimized the park territory, excluding the mining property, then the cultural and economic needs will be addressed perfectly fine. New Prosperity will be able to continue the project and sufficiently aid in strengthening the economy, and at the same time, the First Nations’ heritage and culture will still be preserved in the area despite its smaller size.

References

Pynn, Larry. “Tsilhqot’in Set to Declare Site of New Prosperity Mine a Tribal Park.” The Vancouver Sun. The Vancouver Sun, 11 Sept. 2014. Web. 07 Oct. 2014. <http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html>

“The New Prosperity Project.” Taseko New Prosperity. Taseko Mines Limited, n.d. Web. 07 Oct. 2014. <http://newprosperityproject.ca/project-description>

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Lenz, Gareth. The Dasiqox Tribal Park includes Fish Lake, above, as well as the site of Taseko’s proposed New Prosperity mine. Digital image. The Vancouver Sun. The Vancouver Sun, 11 Sept. 2014. Web. 7 Oct. 2014. <http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html>

Isis Pharmaceuticals is just one of many businesses feeling the effects of sharing a brand name with a terrorist group. 

ISIS, the anti-government Islamic militant group fighting in the Middle East, has affected hundreds of businesses in the United States and Europe by doing nothing in the business world itself. How? It is all in the name.

270 companies are being damaged because they share the same name as the terrorist group. Businesses  such as: Isis Bridal and Formal, Isis Collections Inc., and Isis Pharmaceuticals Inc., are receiving undue responses from consumers about their brand name, most of them speculating that these stores may have a connection to ISIS. Already, customers have returned various goods to the stores because of the brand label. This has affected sales and has ruined the “brand image.”

It is unfortunate for businesses to end up in this state even though the identical brand names are purely coincidental. This demonstrates how powerful brand image and reputation can be. Even if a company has an excellent reputation, once a label has a negative connotation to it, the business may start to go downhill. As evident from the article, many business owners are frustrated and tired of the attitudes of consumers who believe Isis stores support the ISIS group. Some have even considered to change their brand name and the titles of their upcoming products to try to disassociate their company from the terrorist organization. This is a costly move and, according to Ries and Trout, will take much effort for companies to re-position their brand into the mind of the consumer. It is highly important to have a memorable, distinct name out in the market to attract consumers and garner attention. “Isis” companies received attention, no doubt. But it was the wrong kind of attention. As long as ISIS continues to make news, these businesses will still continue to feel the detrimental effects of their label. I believe businesses can definitely try to change their name to something more appealing. Nonetheless, it will take time and money and effort to carry out, and it may continue to harm the business further if the new name is not positioned correctly.

References

“Positioning As Popularized by Al Ries and Jack Trout.” QuickMBA. QuickMBA.com, 2010. Web. 05 Oct. 2014. <http://www.quickmba.com/marketing/ries-trout/positioning/>

The Associated Press. “‘Isis’ Name a Black Flag for Businessess.” CBC News. CBC/Radio Canada, 03 Oct. 2014. Web. 05 Oct. 2014. <http://www.cbc.ca/news/business/isis-name-a-black-flag-for-businessess-1.2786467>

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Ignelzi, Lenny. Digital image. The State. The State, 3 Oct. 2014. Web. 6 Oct. 2014. <http://www.thestate.com/2014/10/03/3722756_whats-in-a-name-trouble-for-firms.html?rh=1>

Chang Lao’s blog post on the poor business ethics of KFC highlighted the violation of basic moral values. According to reports, KFC’s chickens have been fattened with illegal drugs and their ice cubes had 13 times more bacteria than their toilet water. This harms the business’ reputation, and I completely agree with Aiken that the KFC “will lose the trust of their consumers…[and face] a decline for their company.”

I decided to do more research on other fast food chains, more specifically McDonald’s, to see if they practiced similar ethics as China’s KFC. According to Forbes, a recent scandal reported that Shanghai Husi Food Co, a supplier to McDonald’s and KFC in Shanghai, “reused meat that had fallen to the factory floor, as well as mixing fresh and expired meat.” As a result, Husi was shut down and both fast food companies have switched suppliers.

I believe such practices are an extremely poor application of business ethics. These acts put the health of consumers at risk and can further damage the reputation of these chains. Despite the claims that fast food chains are switching to better, safer suppliers, these scandals that have surfaced multiple times placing an increased distrust among consumers. I personally try to avoid these fast food chains as much as possible because I know that these companies use fillers, chemicals, and preservatives to make their foods taste great, look more appealing, and even last after a full year. Nevertheless, many consumers still flock to this fast food chain because it is quick, convenient, and filling. McDonald’s still remains the number one fast food chain in the world and it does not seem to be drastically losing shares despite their poor safety and  moral ethics.

References

Lao, Chang. “CLASS 3: BUSINESS ETHICS – KFC.” Weblog post. Chang Lao’s Blog. WordPress, 8 Sept. 2014. Web. 27 Sept. 2014. <https://blogs.ubc.ca/aikenlao/2014/09/08/class-3-business-ethics-kfc/>

Solomon, Brian. “McDonald’s, KFC Snagged By New Food Safety Scandal In China.” Forbes. Forbes Magazine, 21 Sept. 2014. Web. 27 Sept. 2014. <http://www.forbes.com/sites/briansolomon/2014/07/21/mcdonalds-kfc-snagged-by-new-food-safety-scandal-in-china/>

“Top 10 Global Fast-Food Chains.” Forbes. Forbes Magazine, n.d. Web. 24 Sept. 2014. <http://www.forbes.com/pictures/feji45ihfj/1-mcdonalds-4/>

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Davies, Sally. Happy Meal, Day 180. Digital image. Treasure Hunt Adventure. On Topic Media, 12 Oct. 2010. Web. 26 Sept. 2014. <http://www.treasurehuntadventure.net/mcdonalds-food-indestructible/1/>

I came across this video while checking  Twitter and I found it to be interesting, yet at the same time, appalling. We have all heard and seen the outrageous line ups for the release of Apple’s brand new inventories. The most popular items include the iPhones in which dedicated Apple consumers line up for hours, even days, to get their hands on one. With the recently release of the iPhone 6, people still lined up outside stores of course, but not with the original intention.

For past iPhones, consumers lined up because of pure excitement and interest in the Apple product itself. Like any loyal consumer, after waiting long hours to get into the store and finally buy one with their own hard-earned money, they would normally start using the device, testing out its features, and sync it with their other devices. The video shows people lining up for an entirely different purpose. At first, it seems that all these customers are in line to buy the iPhones for personal use. However, once they start walking out of the store with 2, 3, even full bags of iPhones, you start to get suspicious. As the camera shows, the consumers already started selling the phones to other people who paid in pure cash. We can assume that the original consumer sold the phone for more than they bought it, therefore making some profit.

This leads to a correlating article that states that in China, the iPhone 6 and iPhone 6 Plus are being sold for $1430 and $2400, respectively, by smugglers wanting to make a brisk profit. Although the black market, is profitable for the smugglers, I believe that it is an unethical way of making money and is ultimately detrimental to the economy. First of all, if a good part of the consumers purchase multiple iPhones just to sell it to other people, most of Apple’s target market is not reached. With most of the inventory sold to customers that do not really care, the consumers that actually value Apple products for its features and efficiency miss out on purchasing a phone right away and are put off. Apple may lose some of its devoted consumers and may need to end up cutting prices of their products. The black market negatively affects the economy as a whole in ways in which taxes are lost and unfair competition arises. It is insane to see smuggling and the black market thrive within the world of technology and I believe if Apple does not capitalize on this issue, serious consequences will result.

References

CaseyNeistat. “Black Market Takes Over the iPhone 6 Lines.” Online video clip. Youtube, 20 September 2014. Web. 26 September 2014. <https://www.youtube.com/watch?v=Ef_BznBwktw#t=369>

Wan, William, and Liu Liu. “IPhone 6s Being Sold for Insane Amounts of Money in China.” Washington Post. The Washington Post, 22 Sept. 2014. Web. 23 Sept. 2014. <http://www.washingtonpost.com/blogs/worldviews/wp/2014/09/22/iphone-6s-being-sold-for-insane-amounts-of-money-in-china/>

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Neistat, Casey. Digital image. Cult of Mac. Cultomedia Corp., 22 Sept. 2014. Web. 26 Sept. 2014. <http://www.cultofmac.com/297103/video-shows-black-market-took-iphone-6-lines/> 

Wholesaler company Costco has recently announced that they will no longer be affiliated with American Express in Canada. As their contract with AmEx expires in December, they have adopted a new agreement with Capital One Financial Corp. to produce a new Mastercard that will serve as both a credit card and a Costco membership card. Costco stores in the U.S. will still accept AmEx, but Canada’s stores will not.

I found this news particularly interesting mainly because my mother is an active user of her Costco AmEx card. Both my mother and stepfather claim that some of the advantages of having this card is that they can use it abroad in other countries for travel and have an alternate back up just in case the Mastercard or Visa does not work. In addition, they emphasize that utilizing a card specifically for Costco and only a few other stores is useful when keeping track of payments and bills. With the new proposed deal, I asked my parents if they would up to purchasing the new Mastercard that the rest of Costco consumers will to resort to. They said no since they already have a Mastercard and are not in need of a new one. Unfortunately, they have no choice as the retailer requires shoppers provide the card before they can even make purchases. Although this may be a tedious process for some of the company’s consumers, both Mastercard and Costco promise that this will “offer more value, better benefits and increase savings for cardholders and Costco members.”

References

DeChillo, Suzanne. File Photo of Shoppers Leaving a Costco Outlet in New York. Digital image. The Globe and Mail. The Globe and Mail Inc., 18 Sept. 2014. Web. 21 Sept. 2014. 

Strauss, Marina. “Costco Canada Switches to MasterCard from AmEx.” The Globe and Mail. The Globe and Mail Inc., 18 Sept. 2014. Web. 21 Sept. 2014. <http://www.theglobeandmail.com/report-on-business/capital-one-said-to-replace-amex-as-costcos-canada-card-issuer/article20665637/>.

The Canadian Press. “Costco Canada Shuffles Cards: Capital One, MasterCard Trump American Express.” CTV News Montreal. Bell Media, 18 Sept. 2014. Web. 21 Sept. 2014. <http://montreal.ctvnews.ca/costco-canada-shuffles-cards-capital-one-mastercard-trump-american-express-1.2013371>.