Hong Kong’s Causeway Bay remains world’s priciest retail district


Hong Kong Causeway Bay is once again considered the most expensive retail area in the world. As someone from Hong Kong, I have always known that Causeway Bay is one of the most expensive places. Although I go there so often, I never realize that the property price is that high. However, all these leave me a question: If the rent is so high, how high must their profit margin be?

With a fixed cost that high, it is hard to imagine how clothing stores and pharmacies (There are actually pharmacies in the most expensive region in the world!) can actually survive in this region. However, in a consumer point of view, when I buy a piece of clothing in the clothing stores in Causeway Bay, am I actually paying for the beautiful design of the clothing, or am I paying for the rent so that I can buy that piece of clothing in a convenient location? It builds to my understanding on value proposition that business doesn’t only create value for providing a service or product for you, but there is also value in making it more accessible.

Accessibility can be expensive, just look at Causeway Bay.

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RE: Lets Make the Switch.

Original Post: https://blogs.ubc.ca/jamessl/2013/11/12/lets-make-the-switch/

While reading other’s blogs, I came across this interesting blog post about electric cigarettes. Many have said that electric cigarettes are more safe and less damaging for smoker and this post argues that cigarette firms should switch to produce electronic cigarettes, but I see a number of issues.

For cigarette firms, I believe their machines are not capable of producing electronic cigarettes, thus switching will generate huge cost and it will completely change the operation of the firm.

In a marketing perspective, Phillip Morris and British American Tobacco are both very associated with Tobacco cigarettes. If they also produce electronic cigarettes, it might create confusion for consumer, hindering their sales and profit.

Lastly, bringing it back to the corporate social responsibility perspective, I raise a point that electronic cigarettes might not actually be a substitute to tobacco cigarettes. Most people who smoke do so because smoking is like a lifestyle to them, knowing that tobacco cigarettes are bad for them. The likely result might just be people consuming both cigarettes at the same time.

Sometimes, I wonder can a demerit good producer even be socially responsible. Do they even care?

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RE: Drones Delivering Pizza? Venture Capitalists Wager on It

Original Post: https://blogs.ubc.ca/lamjerome/2013/11/06/dronesdeliveringpizza/

While looking at my classmate, Jerome Lam’s Blog post, I encounter a very interesting blog post on using Drones to deliver pizza. I agree to his points and do personally look forward to this. However, my interest is on why, not how.

The research and development of using Drones to deliver pizza is certainly very costly. For a pizza delivering business, which has a thin profit margin, it doesn’t make much sense to me. Why will the accountants say yes to this?

There are two reasons I can think of. Firstly, Using Drones to deliver pizza is definitely a point of difference for the pizza delivering business. Imagine a scenario: “Pizza A and B taste and cost exactly the same, but PIZZA B DELIVER PIZZA WITH DRONES”. I will definitely choose Pizza B. Secondly, I think it is because it is costing more to hire a person to deliver pizza. This raises an interesting point. When people are complaining how people in developing nations are “stealing their jobs”, what will they think if robots are stealing their jobs now? Is it a corporate social responsibility for business to hire people even if they can use robots to lower their cost?

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Great things doesn’t mean great stock


This article states that a lot of different technology companies are planning to go public following the success of Twitter’s IPO. The article leads to an interesting issue that I recall reading from a book by Warren Buffett: something along the lines of only buy a stock when you know how it functions and how it can make profit.

Personally, I use a lot of these technology brands, I tried using Box, Dropbox and Evernote myself and I think they are great tools that really make my life easier. However, great things don’t necessarily means a great stock. I recall learning something called the Price-Earning ratio in the COMM101 class on finance and it brings us right to the issue. As these technology stocks come into the market with a high price, how high will this ratio be if they still can’t figure out a way to earn large profit?  In a current state, I am not even confident that Facebook can live up to their expectation and start to earn more money as they rely largely on advertisement.

For Technology company, they need to start thinking about how can they make the profit in addition to creating great products.

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Further readings

Buffett won’t invest in tech stocks 5th MAy 1998

Five reasons why this is the worst earning report Facebook has ever issued 1st May 2013


GM’s new customer service boss once worked on the factory floor



This new appointment in GM reminds me of Zappos’s customer service. Although GM is not radically changing customer service just by appointing a new person in charge, the article still reflects how customer service can go beyond just satisfying customers.

I see that GM’s appointment have achieved a number of goals: 1. Having someone who once worked on the factory floor, Boler-Davis is able to more easily communicate feedback with the product development team with a level of technical expertise, tying the departments more closely together; 2. Her innovations of brining call-center employees back in-house shows determination to improve customer service quality, increasing customer satisfaction and drawing customers closer to the company; 3. Having a management individual to regularly take telephone calls like an ordinary worker can boost employees’ moral, drawing employees closer to the company.

It might just be an appointment in the customer service sector of the company, but what it does for the company is always more than that. GM’s appointment shows a culture of connection in many levels: between departments, between customers and the company and also between the employees and the company. The value of the culture is its ability to guide a company.

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(External Blog) Why Does College Cost So Much? Posner


As a student in UBC, the issue of why college cost so much relates to me greatly. The value proposition that UBC can offer me is like a VIP ticket to a concert, it enables me to so many different opportunities to experience the “magic” in the real world. However, why is it so expensive? This blog post certainly can tell you some of the likely reasons. What interest me most about this blog post is however the author’s suggestion that bringing college education online can solve the problem.

While I think that online education can bring a lot to the world, I am not confident that it can lower the cost of college, since I think the value proposition of college education is more than knowledge, but contains an element of exclusivity. This element of exclusivity can be the name of the university and even the amount of group work experience that you cannot get from online education.

Online education can certainly make the public more knowledgeable, but I will not consider it as a substitute for college education, since university degree from a good university isn’t only about the education, but also a kind of status.

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Drawback of Points of Difference


The competition in the smart phone industry is abnormal, phones have been in a competition of pushing out new features as fast as possible, while some “new features” a year ago might is now considered a point of parity in the smartphone industry.

Marketing relies heavily on the point of difference on top of the point of parity to differentiate a product from its competitors. Some phones establish its point of difference through a chase of numbers: more pixels, larger screens and etc. Apple, however, took a different approach, they put new functions on their phone, now you can unlock your phone through fingerprint.

My focus however, is on the drawback of this competition for points of difference. The fingerprint unlock system creates wide concern and security issue.  The article suggests that fingerprint is overall not a very good way to secure your phone, while other raise concern over whether the government and hackers can now get the fingerprint information of individuals. In my opinion, over focusing on points of difference might lead to putting immature technologies into phones, ruining the product in the end. I personally won’t want a perfectly designed smartphone to be ruined that way.

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What if U.S. government is a company?


United States, one of the world’s most powerful countries has been shutting down its operation for days. I wonder what if U.S. is actually a company.

In a management terms, U.S’s management is in turmoil and there are divergent in the direction for the future. It can be said that it is managing issue that leads to the shutdown of operation.

In accounting terms, U.S. seems to be facing greater problems, the amount of liabilities U.S. government has is about 75% of the GDP and rising in Obama years. U.S. might face a “debt default and a near-certain credit downgrade” if it doesn’t resume its operation according to the article.

In theory, U.S. reassembles how the world’s worst company might look like on paper. In my view, however, U.S. most valuable asset is its brand and the value of the brand “United States of America” is priceless, thanks to their great marketing as the “protector of freedom and democracy”.

However, like any company with a big brand, the value of the brand cannot operate the company and finance its liabilities itself. U.S. needs to look way ahead in how to grow themselves and improving their finance.

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Downfall of BlackBerry


This news article refers to the result of the 100 biggest global brands standing, which BlackBerry recently fall out of the table.

The issue of BlackBerry’s downfall has been on the table. It is close to the hearts of Canadians as BlackBerry is a Canadian company and as much as it is reported again and again how BlackBerry is failing, I can still see people on the street, using BlackBerry.

How did it happen? Motorola once launch this product called Envoy, which was like a personal assistant. It was one of the gadgets with the most functions at that time. Despite its list of “capabilities”, a product called PalmPilot 1000, with much less capabilities, sold much better than Envoy.

BlackBerry is in similar shoes: compared to iPhone and Androids, it has much less function, yet it has its points of difference, security and efficiency. BlackBerry failure to position itself according to its strength is crucial. As BlackBerry launch its tablet “BlackBerry Playbook”, it failed miserably. The way I see it is that BlackBerry is about getting things done, tablet is about entertainment, exactly everything that BlackBerry doesn’t have. Focusing on strength can be a key to brand positioning.

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Business or Charity


China was investigating foreign manufacturers of infant milk formula. A question strike me as I read this news article, why is there such a high demand for infant milk formula from foreign countries? The answer to this question can be found in 2008, when six infants died due to poisonous milk powder. The lack of business ethics of Chinese milk products manufacturers certainly contributed to the general unpopularity of Chinese milk products.

However, what is business ethics? The words sounds simple and literal, yet abstract. Chinese dairy companies added in melamine, that falsely boosts the protein levels in milk, in order to make bigger profit. Then, is business ethics about not trying to make as much profit? I personally will argue no. I think that business is all about making money legally and that business ethics is a respect to laws and regulations. Chinese dairy companies are unethical due to their failure to respect health and safety regulations. On the other hand foreign manufacturers who might control supply to earn great profit is just doing their job.

A business is about profit. If the owners and stockholders cares about a social cause more, they would have started a charity instead.

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“China Probes Foreign Baby Milk Firms for Price Fixing.” BBC News. BBC, 3 July 2013. Web. 12 Sept. 2013.

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