Alexander Lee's Blog

Sony’s new game console, the playstation 4, was just released on Friday and sold more than 1 million consoles in the first 24 hours (CTV News). According to CTV, Sony anticipates to sell 5 million consoles by March. My friend Faiyaz Moosa, blogged the day before the release of the Playstation 4 wondering about which console, the Playstation 4, or the Xbox One, which will be released on the 22, a week after the Playstation, will receive more positive publicity and a greater success rate. He noted that he believes customer loyalty will have a major impact of customer decision on what to buy. He also stated that they are substitute products and stated, why would someone wait an extra week to get a similar product. Because they are substitute products, that factor in which I believe will influence which console outsells the other is the price at which it is sold. Sony has priced the Playstation so that it is $100 cheaper than the Xbox. In my mind as a consumer with no brand loyalty to one, why would I buy a similar product that is $100 more expensive and has similar functions. I believe that because of the lower price point, the Playstation will outsell the Xbox in sales.

Faiyaz Moosa’s Blog: https://blogs.ubc.ca/faiyazmoosa/

In recent news, Canada has faced a large decrease in tourism since 2000. Over the past 13 years, visits to Canada have dropped by 20% despite the recent boom in world traveling. Tourism is one of the worlds fastest growing businesses today, currently holding 600,000 jobs in Canada and accounting for 2% of the national GDP (CBC News). Last year in 2012, 16 million visitors had landed in Canada, with most being from the US, UK, Germany, and France. The country responsible for the largest drop is the US. The main reason for the decrease in American tourists is the increase in Canadian dollar strength, making it more expensive for Americans to travel here. This seems to be a problem for several businesses throughout Canada, that some international businesses have stopped doing business in Canada from the increasing price for them due to our increase in dollar strength. This raises the question, “How much is the Canadian economy being impacted due to to loss of business in Canada due to high prices?”. The firm Deloitte recommends that Canada needs to learn to tailer more of our businesses towards tourism, to increase travel and international business in Canada.

“It’s clear that strengthening tourism would have a positive impact on Canadian companies and our overall economy,” says Deloitte partner Ryan Brain.

For More Information: http://www.rcinet.ca/en/2013/06/28/tourism-down-decreased-promotion/

http://www.cbc.ca/news/business/canadian-tourism-declines-despite-world-travel-boom-1.2426675

A new friend of mine, Cole Christiansen, had recently blogged about our class discussion in the lecture of “People, Culture, and Teams” and how creating a positive work environment with many employee perks help increase productivity in activity and lowering turnover rates, but also wondered, what other large companies create a positive working environment. The company thought of, was Google. Google has a tremendous amount of employee perks, such as free food, many unique amenities, dry cleaning, concierge, the list keeps going on. From studying these two companies with positive work environments, it raised the question, does a positive work environment with many employee perks always keep employees happy and prevent turnovers? To answer the question, I looked at the company EA (Electron Arts). EA offers many perks to their employees such as Google and Zappos do, including amenities such as arcades, soccer fields, gyms, and high tech lounges, but are their employees happy? One of my high school friend’s cousin used to be a programer at EA, and said his time was less than enjoyable, where he eventually left the company for another gaming studio. Working at EA, the employees are under constant stress and pressure, creating a negative work environment. So even though companies may have many employee amenities and perks, a positive work environment is not always created, it comes down to the management.

Cole Christiansen’s Blog: https://blogs.ubc.ca/colechristiansen/

Once one of Canada’s most prominent companies RIM, now Blackberry, has faced yet another grim statistic within the last quarter. Already this year, with the fall of the Black Berry stock, making the company go private, the company has been facing financial hardship. It was released today, from market research firm IDC, BlackBerry’s global share of the of smartphone market in the third quarter this year has dropped to only 1.7% compared to last years third quarter 4.1%, a change in 41%. While Black Berry has decreased, Google has took a lead on global share, now holding 81% of all smartphones around the world, an increase in 51% from the same time last year.

One of the ideas in which we learned to create a company through entrepreneurship is the method of Lean-Start up. This is different from a regular start up company, as the product or service which the firm provides, adapts and changes with the customers wants. This is one problem Black Berry did not realize. Blackberry’s distinction on their phones was their keyboard, something in which phones companies moved away from to go to touch screen. Because Blackberry did not adapt to customers’ wants, and retained upon a product which did not change, they had lost many loyal customers, demand, and brand image, resulting in their downfall.

Based on our in class discussions, creating a shared value between customers and people surrounded by the company is beneficial both towards the company and the consumers. Many companies create shared value, such as the local yoga store, Lulu Lemon, and shoe company Toms, but a company in which exemplifies the definition of Creating Shared Value is the food company Nestle. Nestle is very involved in helping communities in developing countries. In many cases, Nestle helps provide clean water, education, as well as helping increase productivity in these communities by providing techniques and educations to locals.

More companies such as Nestle are needed in todays market, giving back to the communities to which has helped its success. By creating shared value with communities increase their brand image as well, create a more sustainable lifestyle for those living in that community. With this brand image, it allows Nestle to charge a higher price for their goods, while still retaining the demand for their products, as it can be viewed that they are using their money for creating value in communities. Nestle’s executive committee stated their main goal is, “bringing Nutrition, Health and Wellness into the lifestyle in today’s world. The 4th Nestle Healthy Kids Program is expected to benefit 6,500 children to enhance their health and nutritional education”

Nestle does truly live to their motto, “Good Food, Good Life”

For more information on Nestle’s global initiative: http://www.nestle.com/csv/nestle

The iPhone 5c was released in September and has been a selling over international markets. Bell Media Business Blog writes how the iPhone 5c is the best iPhone for business purpose with the main reason that its simpler, yet has the main functions of an iPhone. The article states that a simpler phone with less functions is beneficial in the long run because it tends to be easier to support. Their theory is that because it already uses the same technology of the iPhone 5, which has already been used and on the market, there will be fewer things that go wrong and thus, have greater reliability.

My opinion towards this article, is that simplicity is not the iPhones best reason why it is better for businesses. I view that its price is a greater strength towards businesses who buy corporate phones for their employees. The iPhone 5c still has the qualities of an iPhone, but is much more durable as it is made out of plastic, which is much better for business use, as well, has a cheaper price relative to other smart phones and iPhones. I agree with the article, that the iPhone 5c is a perfect phone for business use.

Bell Media Business Blog: http://businessblog.bell.ca/productivity-tips-tools/apples-iphone-5c-whats-in-it-for-businesses/

Since the US government shutdown, many people associated with the government, from federal employees or third party companies that work forthe government have been hit hard financially as there is no work or money made. Because of the economic hardship, and financial troubles created by the government shutdown, the Korean car company Hyundai announced that they will allow federal workers impacted by the shutdown to defer loan and lease payments (Hyundai News Site) on their Hyundai’s. This has become a PR success for Hyundai.

After this news of Hyundai’s generous appeal, the largest Japanese car company, Toyota follows in similar footsteps trying to create the same public image, except, with a larger approach. Toyota stated that as of October 14th, 2013, they will give 3 months deferral on payments for any customer affected by the shutdown, not just federal employees, for Toyota and Lexus (Bloomberg Business). Toyota has realized the widespread impact of the government shutting down, not only on federal employees, but many other businesses and firms that associate with government projects. 

This example shows two different self marketing strategies between two competing companies. Hyundai first started the approach of making it easier for people to pay, but Toyota made it even better.

The Swedish furniture company Ikea today released that they will be selling solar panels for residence in the UK. Solar panels have been an increasing market over the past decade as the environment has become a large part of western lifestyle. Ikea advertises that for each panel, it will take 7 years to pay off, and after, the energy created from the panels will be free energy (CBC News).

As a consumer, I think this is a very smart move by Ikea. Personally, my family has been planning on purchasing a solar panel to reduce our energy price, but have not found a reliable and credible company to supply and maintain the panels. Ikea is a well known brand and also is responsible for the maintenance. Having Ikea sell mass produced solar panels not only lowers the overall costs of the solar panels, making them more accessible, but also increases their revenue stream. Having Ikea be responsible for their maintenance, set up, and monitoring creates a stronger customer relationship.

Ikea is now known as a more sustainable company that is influenced of the impact on the environment. This is a good marketing scheme.

The US government is on shutdown today, affecting 800,000 American government employees (Globe and Mail). Besides the temporary unemployment, causing people to spend less, many Canadian exporters are at risk as US boarder and trade employees are no longer in work. Canadian companies are bracing for delays in shipments, and less demand for their products as the US government is in turmoil. If the US government is suspended for a week, there will be not much damage to the Canadian economy and businesses, but rather seen as an inconvenience. But if the suspension last longer than that, the Canadian economy can result in a 700 million dollar loss per week, according to CTV News Canada. With the US being Canada’s largest trading partner, importing more than 462 Billion dollars last year (Globe and Mail), having the boarder slowed down will greatly affect Canadian businesses and the Canadian economy.

The smart phone industry has exponentially increased over the past 5 years. With many large corporations such as Apple, Samsung, and HTC all producing their own variations of smart phones. What once used to be one of the most popular smart phones on the market, “Black Berry”, has now had an offer from Fairfax financial holdings Ltd. to go private, as they had lost 1 billion dollars last quarter. Fairfax already owns 10% of the Blackberry stock, but will offer 4.7 billion dollars for the company to go private. With Blackberry only holding 5.1% of the smartphone market vs. Apple’s 39.2%, Blackberry has lost its strength in the market. Going private could save Blackberry from disintegrating and give them more time to create a new product which will hopefully create more revenue for this Canadian company.

In an accounting aspect, will the company succeed in higher growth by removing public share and becoming privet? Yes, in this situation, the money lost based on the demand of Blackberries would benefit the company.