With an increase in passengers and a large number of aging aircraft in the sky, it is no wonder the competition between aircraft manufacturers is cutthroat. The most prevalent example of this is Boeing’s successful bid to slap 300% tariffs on Bombardier’s C-Series jets sold in the US.

I felt that Cris, in his blog post, presented many well thought out arguments as to why Boeing is being hypocritical in its plea for tariffs; however, I disagree on a few points. Although many people have argued that the two aircrafts do not compete with each other, I see the contrary. The Boeing 737 MAX7 flies 138-153 passengers and retails for around US$12 million more than the CS100 (and 2.5 more than the C300) [Becahi, 2017]. At similar price point and configurations that could make capacity identical, the aircrafts both serve similar route demands.

Boeing’s case against Bombardier could also have some merit. It is plausible that Bombardier, who desperately lacks major clients for the C-Series (only Air Baltic, Swiss Air, and Air Canada have placed orders), sold the plane below market value so that they could market Delta as a client. With the largest fleet in the industry and healthy revenues, Delta’s order proves that Bombardier’s jets can meet a growing demand and make economical sense in a large airline. It also increases the odds Delta’s Skyteam partners and subsidiaries will purchase the jet.

The efforts of Boeing to block Bombardier may have backfired, however, with Airbus purchasing a majority stake in the project. By moving production to Alabama, the tariff will no longer apply making the C-Series a competitive product once again. This also provides Airbus with another revenue stream without any of the research and development costs, heightening Boeing’s competition with the European manufacturer.

The major loser in this dispute might be technological advancements. Bombardier’s C-Series is built with advanced aluminum and composite materials, an innovative engine design to reduce noise, and a state of the art flight deck. These innovations are necessary in order for Bombardier to compete with Airbus and Boeing who have the advantage of production scales, cash, and existing relationships. Bombardier needs to convince airlines that their products are so good that it is worth the additional costs of maintenance, training, and logistical expenses to switch over. Without competitors who focus primarily on innovation to gain traction, technological advancements in the industry may slow down.

Boeing may still be the King of the castle, but its grip on power is constantly being challenged. With China and Japan manufacturing their own new aircraft, it may only be a matter of time before Boeing has to put their engines into overdrive.

[Word count 449]

Citations:

Bechai, D. (2017, May 30). Boeing Hikes Jet Prices. Retrieved November 11, 2017, from https://seekingalpha.com/article/4077390-boeing-hikes-jet-prices

Images (in order of appearance)

Bombardier CS100 [Digital image]. (n.d.). Retrieved November 11, 2017, from http://www.bombardier.com/content/dam/Websites/bombardiercom/News/BA/BCA%2020151218_CS100_P1FF_HR1.jpg/_jcr_content/renditions/original

Swiss Bombardier CS100 [Digital image]. (n.d.). Retrieved November 11, 2017, from http://commercialaircraft.bombardier.com/content/dam/Websites/bombardiercom/News/BA/20150910%20BCA%20C%20Series%20Toronto%202%20HR.jpg/_jcr_content/renditions/original

CS flight deck [Digital image]. (n.d.). Retrieved November 11, 2017, from http://www.bombardier.com/content/dam/Websites/bombardiercom/Multimedia-Library/BA/Commercial-Aircraft1/CSeries/interior/CSeries_Interior_12_HR.jpg/_jcr_content/renditions/original

Major US Internet Service Providers

With the vast amount of capital and lobbying power that major American internet service providers (ISPs) have, their large influence is not surprising. As discussed in the BTM lecture, there is growing concern among consumers about a lack of online privacy due to the reversal of regulations that allow US ISPs to collect consumer data without consent. One problem is that the FCC is headed up by partisan officials appointed by the current administration. Given that many of the appointees previously worked for internet service providers or have financial incentives and pressure, the policies that are created generally serve businesses rather than consumers.

A larger concern, as noted in an American Civil Liberties Union (ACLU) blog, is that companies can use data in order to build discriminatory profiles of consumers. Retailers have used locations to offer customers in high-wealth areas discounts while raising prices for those in low-income areas with few retail options. I found the ACLU blog to be useful because it presented arguments that had strong and tangible impact on some of the most vulnerable citizens in society. It also highlighted the power that ISPs have by showing how politicians, who are considered to be “privacy champions,” are giving in to pressure from ISPs.

I believe that the government, especially in the United States, needs to play a larger role in protecting consumers. By allowing ISPs to collect information without the consent of individuals, it disproportionately impacts consumers who are less educated, less aware, and of a lower socio-economic class. This is ignoring the mandate of the government to look out for the best interest of its citizens (who are mostly consumers) by allowing them to be exploited by corporations when previous laws existed that provided substantial protection. It also works counter-intuitive to other government programs, such as welfare, that look to aid the most vulnerable in society. With the reliance on the internet to find jobs and shop, it further perpetuates inequalities when the government is unwilling to step in for the consumer. 

This argument could be countered with the idea that ISPs generating larger revenues gives back to the populous via tax revenue. The problem with this is that executives of various ISPs have admitted that reducing the rules on collecting data will not yield a substantial increase in revenue. This means that consumers privacy is being violated in return for very little benefit.

In a world where the digital sphere is essential to life, the prospect that ISPs could know more about us than we do is a scary proposition. Unfortunately, the lack of regulation by governments is leaving those who are already vulnerable in society more exposed than ever.

[Word count: 450]

Works Cited:

Snider, M. (2017, April 04). ISPs can now collect and sell your data: What to know about Internet privacy rules. Retrieved October 28, 2017, from https://www.usatoday.com/story/tech/news/2017/04/04/isps-can-now-collect-and-sell-your-data-what-know-internet-privacy/100015356/

Turner, N. (2017, March 10). Congress: Don’t Let Internet Providers Sell Our Data to the Highest Bidder. Retrieved October 28, 2017, from https://www.aclu.org/blog/privacy-technology/internet-privacy/congress-dont-let-internet-providers-sell-our-data-highest

Images (in order of appearance):

[Internet Service Provider Logos]. (n.d.). Retrieved October 28, 2017, from https://championelite.files.wordpress.com/2010/11/internet-providers2.jpg

Prell, J. (2011). [Man surfing the internet]. Retrieved October 28, 2017, from http://wkdq.com/files/2011/10/Web-surfing.jpg

In the highly competitive and low-margin airline industry, the corporate culture of Alaska Airlines (Alaska Air Group Inc. NYSE: ALK) is making them stand out (Ekstein, 2017). Their commitment to customer service over corporate greed is responsible for their gigantic collection of airline awards (Ekstein, 2017).

One major difference between Alaska and its competitors is the way they approach performance management. Unlike airlines that give out bonuses based on revenue per seat mile or on time performance, Alaska gives out bonuses to employees who “do the right thing (Ekstein, 2017).” This includes anything from giving champagne to a couple celebrating their wedding anniversary to waiving flight change fees for a family emergency (Ekstein, 2017).

Customer service is becoming increasingly important in the airline industry and a key reason why the “legacy carriers”* are losing market share. With public relations nightmares on the rise due to social media, protecting a brand image is becoming increasingly difficult. By dealing with the issues on the spot and ensuring that customer needs have been met, Alaska avoids the costly and time consuming processes that are involved in cleaning up a public relations disaster. The savings is evident after United Airlines spent millions of dollars and lost one billion dollars in value after a passenger was dragged off of an aircraft in April (Cox, Rodinova, 2017).

The difference in key performance indicators (customer service over profit) and rewards for employees who demonstrate Alaska’s values shows their commitment to the customer over anything else. These values display the immense weight Alaska puts on creating loyalty through the customer decision journey by creating an experience so good that any non-Alaska flight is a major disappointment. In this sense, Alaska is looking to create value through stakeholder theory; bringing value to the employees by empowering them in their role, bringing value to the customer by creating the best in-flight experience, and brining value to the company by creating strong brand loyalty.

Even with their great customer service, Alaska still faces the issue of being a relatively small west coast carrier. Despite their acquisition of Virgin America, another airline that focused heavily on customer service, Alaska is still struggling to establish their brand through the United States. Much like WestJet relied on their slogan “owners care” to brand themselves as customer friendly alternative to market leader Air Canada, Alaska will lean heavily on their strong customer service to drive their marketing in new markets.

In an industry that only makes $5.42 per passenger, cutting every unnecessary expense is a top priority (Irvine, 2014). Alaska bucks that trend by increasing its discretionary budget and encouraging employees to go out of their way to make the customer experience better. This unique strategy might be key for Alaska to join the big four** in the US airline industry.

[450 words]

Appendix:

*The “legacy carriers” consist of American Airlines (American Airlines Group. NYSE: AAL), Delta Airlines (NYSE: DAL), and United Airlines (United Continental Holdings Inc. NYSE: UAL).

**The “big four” references the three legacy carriers and Southwest Airlines (NYSE: LUV).

Sources:

Cox, J., & Rodionova, Z. (2017, April 11). United Airlines suffers near $1bn loss in value after passenger was violently dragged off overbooked flight. Retrieved October 14, 2017, from http://www.independent.co.uk/news/business/news/united-airlines-united-continental-shares-slide-drop-expect-passenger-dragged-flight-3411-overbooked-a7678051.html

Ekstein, N. (2017, May 24). Why little Alaska Airlines has the happiest customers in the skies. Retrieved October 14, 2017, from https://www.msn.com/en-us/money/companies/why-little-alaska-airlines-has-the-happiest-customers-in-the-skies/ar-BBBtL2u?li=BBnbfcN

Irvine, D. (2014, June 03). How airlines make ‘less than $6 per passenger’. Retrieved October 14, 2017, from http://www.cnn.com/travel/article/how-airlines-make-less-than-6/index.html

Images (in order they are displayed):

Alaska Airlines Aircraft [Digital image]. (2016, January 25). Retrieved October 14, 2017, from https://blog.alaskaair.com/alaska-airlines/who-is-the-eskimo/

Why Little Alaska Airlines Has the Happiest Customers in the Sky [Digital image]. (2017, May 24). Retrieved October 14, 2017, from https://www.bloomberg.com/news/articles/2017-05-24/how-alaska-airlines-became-the-best-airline-in-the-u-s

The simple objective for professional sports teams is to win a championship, unless it isn’t. Professional sports is about making money and that is no different in the National Basketball Association (NBA). One of the major questions faced by the Association is how much revenue should be shared between teams (Windhorst, 2017).

(NBA Teams with Reported Losses)

One concern brought up by highly profitable teams is that it’s unfair to penalize an organization with a good location and strong management. If someone buys a prime plot of real estate that generates a high rate of return then it’s subject to a tax that increases based on tax brackets; however, we don’t assess an additional tax if the property outperforms those around it. NBA owners who buy franchises with small markets and limited revenue streams know from the outset how difficult it will be to turn a profit, but willingly purchase the team anyways. It’s not the fault of the profitable teams that a bad business decision was made (Windhorst, 2017). The counter to that argument is that it would be difficult for the NBA to function as a 16 team league (Windhorst, 2017). It would mean a shorter schedule equating to less television revenue and a decrease in the fan base from markets that no longer have a team. Even if the number of teams were to be cut down the competition inequality, that currently hurts teams who can’t afford to pay high player salaries, would still exists with the wealthy teams being able to pay salary cap penalties to bring in the big names (Windhorst, 2017). Without some form of revenue sharing, getting close to equality – both on and off the court – is nearly impossible.

(Net Income After Revenue Sharing)

The issue of revenue sharing also brings strategy into question: short term revenue or long term sustainability. NBA owners have a limited timespan to make money off of their team meaning that it is in their interest to raise the current market value. It makes no sense to make an investment that will improve the equality in the NBA down the road when the current ownership will see little of the benefit. Even if current owners were to reap in some of the benefits, the net future value of that money would be less than the current value of the money spent, assuming proper investment. In the long term, increasing the revenue sharing pool would allow more teams to spend money on player salaries in order to be competitive; attracting more interest and larger fan bases to purchase their products (Windhorst, 2017).

In a league where money equals success, is it fair to allow small market teams to perpetually lose money or should more be done to ensure everyone has an equal chance of success?

(446 words)

Sources

Windhorst, B. (2017, September 19). A confidential report shows nearly half the NBA lost money last season. Now what? Retrieved September 25, 2017, from http://www.espn.com/nba/story/_/id/20747413/a-confidential-report-shows-nearly-half-nba-lost-money-last-season-now-what

Images:

NBA Teams with Reported Losses [Digital image]. (2017, September 19). Retrieved September 25, 2017, from http://www.espn.com/nba/story/_/id/20747413/a-confidential-report-shows-nearly-half-nba-lost-money-last-season-now-what

Net Income After Revenue Sharing [Digital image]. (2017, September 19). Retrieved September 25, 2017, from NBA Teams with Reported Losses [Digital image]. (2017, September 19). Retrieved September 25, 2017, from http://www.espn.com/nba/story/_/id/20747413/a-confidential-report-shows-nearly-half-nba-lost-money-last-season-now-what

What’s Wrong With the Golden State Warriors? [Golden State Warriors Team]. (2017, January 24). Retrieved September 25, 2017, from https://static01.nyt.com/images/2017/01/25/sports/25warriors-web/25warriors-web-facebookJumbo.jpg

*Note from the author: much of this blog has be written from my past knowledge of the NBA, professional sports, and revenue sharing across different leagues.

Online gambling has produced some of the most profitable opportunities in the twenty-first century. A natural extension of the pre-existing gambling industry, which is worth over $240 billion in the United States alone, online gambling gives users quick and easy access to place a bet (Pierceall, 2014). Ladbrokes, 888, SkyBet, and Casumo are four of the companies trying to gain a significance presence in the online betting market; however, all are facing fines and public backlash after publishing advertisements that “targeted vulnerable individuals (Davies, Sweney, 2017).”

Generally, corporate executives have an obligation to “make as much money as possible while conforming to the basic rules of the society (Zimmerli, Richter, Holzinger, 2010).” By marketing to a demographic who are the most likely to gamble, each company is trying to maximize the return of their advertising campaigns. If the market research were to be ignored and the advertisements targeted to the general population, the campaigns would become more expensive and see less of a return relative to the amount of money spent. It is also important to recognize that society generally views gambling as a negative. If it truly was the responsibility of a gambling executive to exercise their societal conscious to prevent gambling, they would principally be required to either cease marketing or to shut down their company entirely.

Using stakeholder theory, the betting companies are creating value for employees, stakeholders, and suppliers through the increase in revenue; however, they are not creating value for the customers or the community (Freeman, 2009). These advertisements disproportionately impacted those are who in financial distress; people who are desperate to win money but instead will find themselves throwing away their final pennies (Davies, Sweney, 2017). The addictive nature of these games pushes individuals into a worse financial situation and even into bankruptcy.  The businesses are also harming the community by contradicting the numerous efforts made by governments to curb gambling, especially among high risk individuals. By using a advertisement that pulls pulls at one’s heartstrings, it makes it very difficult to weigh the practical harms of gambling against the chances of fixing all of one’s possible life problems. The companies are also under investigation for violations of the UK advertisement code, which disobeys a societal rule set up to protect the community (Davies, Sweney, 2017).

In running a gambling business, one needs to choose whether their social conscious or the wellbeing of the business is their top priority. The best customers of the gambling industry are the super rich and those who are in desperate need of quick cash; the latter being some of the most vulnerable in society. If all of the negative consequences that inevitably come with gambling can be ignored, then a healthy profit can be made.

[442 words]

Citations:

Davies, R., & Sweney, M. (2017, September 13). Betting firms could be fined over ads ‘targeting vulnerable people’. Retrieved September 13, 2017, from https://www.theguardian.com/media/2017/sep/13/betting-firms-ads-asa-ladbrokes-888-skybet-casumo

Freeman, R. E. (2009, October 1). Retrieved September 13, 2017, from https://www.youtube.com/embed/bIRUaLcvPe8

Pierceall, K. (2014, September 30). The US Gambling Industry Is Worth $240 Billion. Retrieved September 13, 2017, from http://www.businessinsider.com/the-us-gambling-industry-is-worth-240-billion-2014-9

SkyBet [Digital image]. (n.d.). Retrieved September 13, 2017, from http://www.gamingintelligence.com/images/Logo_lg/SkyBet-lg.jpg

Zimmerli, W. C., Richter, K., & Holzinger, M. (2010). Corporate ethics and corporate governance. Berlin: Springer.

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