Akash Patel's Blog

Business students did not always envision becoming a social entrepreneur as desirable.  This attitude is vastly changing.  An example of this is in the story of Alejandro Velez and Nikhil Arora, students at UC Berkeley.  Ready to start their careers in finance upon graduation, Alejandro and Nikhil grew a bucket of oyster mushrooms from recycled coffee grounds because of a lecture they had attended.  Both saw the limitless potential for change with this innovative new idea, and Back to Roots was formed.  Essentially, they produce fresh food from waste, as seen in the graphic below.

So far in 2011, Alejandro and Nikhil’s company has helped families around the country grow over 250 000 pounds of fresh food! ^[1] This is with the help of Peet’s Coffee & Tea, who have provided Back to Roots with approximately 1 million pounds of coffee ground this year! ^[1]

Mushroom Garden Timelapse on YouTube

A profitable finance career was within reach of Alejandro and Nikhil, but they chose to go down the path less traveled.  They chose to use their knowledge to help communities around the world produce fresh food from reused waste.  A sustainable idea such as this can only help our society as we move forward.

Photo Reference

Imagine the trouble that Toyota, a Japanese automaker, has faced in the last year.  In March 2011, an earthquake hit off the coast of Japan resulting in very powerful tsunami waves.  As if this wasn’t enough, Thailand has experienced an excessive amount of rain during its monsoon season.

These occurrences have affected Toyota, but in different ways.  For example, the natural disasters affected Toyota’s production chain.  Factories used by Toyota were damaged by both natural occurrences.  Parts produced at these plants could no longer be fabricated here.  This interruption in the production of parts interfered with Toyota’s distribution plans.  The rising value of the yen has also caused problems because the production of these cars is more costly.  Thus, Toyota needs to look at low-cost production options in other countries.  If production costs rise, this forces Toyota to raise their prices when they bring their products into foreign countries, such as the United States.  With this rise in cost, Toyota runs the risk of losing market shares due to unhappy consumers.  An option that Toyota could explore is opening a factory in Brazil.  With a growing automotive market, Brazil seems like an ideal place for Toyota to resume production.

Photo Reference

Recently, the European Commission has discussed plans on classifying the oil from various oil sands, including Alberta’s, as highly polluting.  Kyle Yoshida, a Commerce 101 student in Section 105, commented on the political risk that is associated with the work that this industry does.  With the concern for our environment growing larger over the past decade, I would have to agree with Kyle’s opinion.  Approximately 5% of Canada’s greenhouse gas emissions are produced by the oil sands industry in Alberta, and also contribute about 12% to Alberta’s greenhouse gas emissions ^[1].  The carbon footprint that is created by this industry is an immense reason why global warming is such a concern to our society.  Oil companies have a corporate social responsibility to achieve economic growth, but within social and environmental limits.  Companies with strategic corporate social responsibilities create a strong image to its consumers, showing that they too care for the world in which we live in.  Reducing their greenhouse gas emissions even by 2% would show their consumers that they are making an effort, thus creating a stronger brand image.  All in all, the oil industry must do something about their environmental impact, or we could all face the consequences.

About the Alberta Oil Sands

Photo Reference

In an industry where it is hard to maintain financial success, WestJet has done a good job of trying to achieve this with the way they manage their employees and their unique corporate culture.  Steven Courtney, a Commerce 101 student in Section 104, commented on the fact that WestJet has done a good job in managing their employees using the concept of employee empowerment.  After reading his post, I concur with Steven’s opinion.  Essentially, employee empowerment gives the employees of a company authority over their work.  They get to make decisions for themselves and are responsible for their own results.  Related to this concept is the organizational culture of WestJet, the values and beliefs that everyone in the organization shares.  In WestJet’s case, their corporate culture can be found in their slogan, “Because Owners Care”.  Due to the concept of employee empowerment WestJet employees are WestJet owners.  As a result, they make their own success.  The employee satisfaction that is created by this management system produces unparalleled customer service.  As Steven mentions near the end of his blog, just look at the success of WestJet’s rivals.  It’s not close because their employees probably don’t have the same incentives as WestJet’s.

WestJet Commercial on YouTube

Photo Reference

Golf shoes.  When you hear these words you probably imagine an older demographic wearing footwear that you would never be caught wearing.  That’s where Kikkor Golf comes in.  Kikkor Golf is described as an “alternative” golf footwear company, with their target demographic being the younger generation of players.  Instead of a “classic” looking golf shoe, Kikkor produces shoes that look more like “skateboard” shoes.  Joseph Schumpeter’s definition of entrepreneurship places an emphasis on innovation and Kikkor fulfills this requirement.  Kikkor came up with a new product, specifically golf shoes, that are comfortable, yet appealing to a younger demographic.  Risk was also present in Kikkor’s situation.  The golf shoe market is primarily dominated by three or four big companies: Footjoy, Callaway, Nike, and Ecco.  Competing with these companies provided a risk factor for Kikkor because they did not know how the general golfing public would respond to their new look shoes.  Kikkor is just over a year old, so the amount of wealth that they have amassed in that time would depend on the sales of their shoes.  It would be no surprised to see Kikkor Golf become one of the major players in the golf shoe industry.

Kikkor Golf Brand Video on YouTube

Photo Reference

Nissan Motors, a Japanese automotive manufacturer, announced big news on Thursday.  Nissan will invest approximately $1.5-billion US in a new plant to be built in Brazil (Globe & Mail).  Earlier this week Nissan’s partner, Renault SA, also announced plans to expand an existing Brazilian plant.  With this news, it is forecasted that Brazil will become the world’s third-largest automotive market by 2015, overtaking Japan (Globe & Mail).  The only bigger automotive markets at that point in time would be China and the United States.

The timing of these investments by Nissan and Renault come at a good time.  Currently, the Brazilian automotive market is slowing down, as illustrated by the 19.7% drop in production from September to August (Globe & Mail).  This drop is in part due to the European zone crisis, as central banks have been combating inflation, trying to keep it under control.  Brazil is part of a group called “BRIC”.  “BRIC” is an acronym for a group of economically upcoming countries.  These countries are: Brazil, Russia, India, and China.  This article reinforces why Brazil is part of BRIC and gives us an indication of what we should expect from them economically in their future ventures.

Photo Reference

Imagine reading this title, “Denmark Levies the World’s First Nationwide Fat Tax”.  When I think of a European country, such as Denmark, obesity is not the first thought that crosses my mind.  Intrigued, I decided to read this post by Matthew Philips on the Freakonomics website.  Mr. Philips reports that foods in Denmark, which contain a saturated fat content above 2.3%, will be taxed 16 Danish kroner ($2.87) per kilogram of saturated fat (Freakonomics).  I found this blog post by Mr. Philips to be quite interesting.  Personally, I am puzzled by this measure taken by the Danish government.  Like I previously stated, obesity and Denmark is not synonymous in my mind.  According to the blog, Denmark’s obesity rate is only 10% (Freakonomics).  To me, an obesity rate of 10% does not seem very high.  Sure the government is trying to decrease that, but is a “fat tax” really the best way to do so?  I believe it would make more sense to educate Danish children at a young age on how to eat healthy.  In the end, it would establish the same goal that the government was trying to reach, which was increasing the life expectancy of the Danish population.

Photo Reference

When you think of Greece you might think about the delicious food or the tropical weather that this country is known for.  Too bad this is no longer the case.  Greece has become synonymous with national debt.  Just this past weekend, Greek officials stated that the country’s deficit will reach approximately €19-billion by the end of 2011 (Globe & Mail).  Now you might think to yourself, why does this concern the European Union?  Well, in order to avoid further national debt the members of the European Union must bail out Greece.  They have proposed a first installment of €8-billion (Globe & Mail).  In our class discussion about Finance, we touched on the Greek debt crisis.  The question was asked, “Are countries susceptible to interest fluctuations?”  After reading this article, I have come to the conclusion that they are.  Greece’s finances are very unpredictable.  If they want to borrow money, Greece needs to raise taxes in order to pay for government expenditures, such as salaries for workers.  Money spent also needs to be cut back so that the debt does not increase.  In the coming months, it will be interesting to see how Greece’s economy fairs and if it will ever recover from this debt crisis.

Photo Reference

Scandal. This is a word that is known well in the business world.  This time, scandal has hit News Corp., a British newspaper. Most notably, it is believed that journalists at News Corp. hacked the voicemails of a murdered teen girl, as well as the father of a bombing victim. Also hacked by News Corp. journalists are various celebrities and politicians. Known primarily as a tabloid, this scandal has cost News Corp. several advertising blocs in their paper, in both Renault and Ford.  Both have said that they will not be advertising in the tabloid from this point onward. British Prime Minister David Cameron was also quoted as saying, “If the allegations are true, this is a really dreadful act.” To gather stories from within our society, it is deemed that newspapers must respect the privacy of the people that they are reporting on. In this particular case, News Corp. has violated this mutual trust. People who are considered “famous” are drawn into the public eye very often, but they must still be treated the same as every other citizen in our society. News Corp. did not do this, and now they are paying the price.

Photo Reference