http://uk.reuters.com/article/2013/11/13/uk-retail-hongkong-idUKBRE9AC0E020131113

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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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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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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http://www.theglobeandmail.com/globe-investor/after-twitter-wall-street-hunts-for-next-big-tech-ipo/article15373048/

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
http://news.cnet.com/Buffett-wont-invest-in-tech-stocks/2100-1001_3-210855.html

Five reasons why this is the worst earning report Facebook has ever issued 1st May 2013
http://qz.com/80462/five-reasons-why-this-is-the-worst-earnings-report-facebook-has-ever-issued/

http://www.theglobeandmail.com/globe-drive/new-cars/auto-news/gms-new-customer-service-boss-once-worked-on-the-factory-floor/article15302906/

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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http://www.becker-posner-blog.com/2013/10/why-does-college-cost-so-much-posner.html

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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