The Business World

Comment on Nicole Lam’s post: https://blogs.ubc.ca/nicolelylam/2013/11/16/hm-sells-inside-their-changing-rooms/

H&M has recently come up with a completely brand new idea in the form of “try and buy” that would allow customers to purchase the products straight from the fitting areas. In her blog post Nicole argues this new strategy that H&M is trying to implement, which is supposed to help them grow and boost their profitability, would in fact backfire on them and the opportunity cost  would lower the demand for their product and the traffic in the store would decrease.

However, I do not completely agree with her is that I do not believe this idea will backfire them, I believe that this new tactic is going to greatly benefit the company. This “try and buy” tactic means there will be more cashier in the shop which means there will be smaller queues in the store which is likely to attract new client as they see no queue therefore they will think that they won’t have to stand in line for a long time before reaching the cashier. This is likely to create a HIGHER traffic which will create a higher demand leading to higher profits.

Source: https://blogs.ubc.ca/nicolelylam/2013/11/16/hm-sells-inside-their-changing-rooms/

http://www.businessweek.com/articles/2013-11-13/h-and-ms-megastore-brings-cashiers-inside-the-dressing-rooms#r=hp-ls

Was Apple’s pricing strategy for the new iPad the most efficient one? Or was it a big error that they made?

The tablet market is a market that has been booming over the recent years and still probably has some margin for growth over the next few years. Since the beginning of the tablet times Apple has been, with its iPad, leading the market, which in general allow them to price their product. However there are more and more companies coming in the market with their tablets and stealing little bits of market share from Apple. This is why Apple’s pricing strategy is confusing: why is the price for the iPad so high compared to other brands (about twice as high) when they could make the price lower and close the market?

The reason for this is that Apple promotes itself as a premium brand, which is a brand with high quality products at high prices. Therefore all their products are priced really high, this would fail with most business but not Apple for the reason that Apple believes that its customer will always follow the bandwagon and therefore keep on buying Apple products regardless of the price. But, if the price was lower, they would kill the competition, create barriers and not lose market shares to small brands.

In conclusion I would say that i both agree and disagree that Apple made a mistake with pricing because they will always make profits but they missed out on an occasion to close off the market.

Article: http://www.businessweek.com/videos/2013-10-23/did-apple-make-a-huge-error-on-ipad-pricing

The following entry will be a comment about Erik Kain entry on the Forbes Blog website: http://www.forbes.com/sites/erikkain/2013/11/16/xbox-one-vs-ps4-the-console-wars-are-just-getting-started/

In the blog entry Erik Kain discusses the future releases of Microsoft’s Xbox One and Sony’s PS4 and the future competition (qualified as war) that will start by the time the new Xbox console is released (PS4 will be released earlier therefore Sony will be competition-free for the time being). He also tries to compare both consoles from what little information there is within his reach before the full release of the consoles on November 15th and 22th.

He came to the conclusion that the consoles aren’t really comparable due to the fact that ever since the start of the “war” between Microsoft and Sony consumers have always been loyal to either one of the brands and is therefore very unlikely to change brand. This is also likely to influence the reviews online because absolutely no one is 100% neutral on the subject and therefore the review will be bias towards whoever the person prefers. In conclusion it is practically impossible to compare those 2 consoles before some time after their release, once gamers have had a handle on the consoles, only then will people be able to compare the Xbox One and the PS4.

Source:  http://www.forbes.com/sites/erikkain/2013/11/16/xbox-one-vs-ps4-the-console-wars-are-just-getting-started/

Yahoo! is going to have some complicated times since the implementation of a new policy where managers have to rank employees on a bell curve and then fire the ones who are who would get low scores over two recent quarters.

Workers are obviously very unsatisfied with the managers using this to monitor their performances but Yahoo! feels it is a necessary step in order to lower the size of their workforce. However this bell ranking ranking, which can be categorized as “forced ranking” might not be the best move for the company as this new policy might demotivate the workforce which would cause high-performing workers to become mediocre workers due to the fear of doing something wrong and ending up in the low end of the curve. At the same time the creativity of the workers, and therefore the company’s, would decrease again because of that fear of ending up in the low end of the bell curve, resulting in a potential decrease in productivity from the workers which would likely lead to a decrease in profitability of the Yahoo!. Because of those reasons I disagree with Yahoo using such a policy.

article: http://www.businessweek.com/articles/2013-11-12/yahoos-latest-hr-disaster-ranking-workers-on-a-curve#r=discussed

A couple weeks ago China’s Third Plenum ended with the Government having many reforms for the country in the next couple years.

One of those reforms is the adjustment regarding China’s famous one-child policy, this policy was that Chinese families were not allowed to have more than one child except for a few exceptions such as twins, rural families and ethnic minorities. The aim of this policy was to reduce the size of the population as back when the policy was introduced the Government believed that the rapid population growth would stop economic growth.

However, lately this policy as had the exact opposite effect as what they were trying to prevent. The policy has been putting a heavy weight on the country’s growth due to problems such as aging population, shrinking labour force and unsatisfied population who are paying extra taxes for this policy. For this reason China will be more lenient with that policy in order to stop those social problems and boost the economy.

Nevertheless I am not sure whether this policy was the right thing to do when introduced. It is true that there was a need for the birth rate control but I am not 100% sure putting up a policy was the best idea, I think they should have educate the population into having smaller families. This would have prevented the problems that China has now and would have probably kept the birth rate low enough.

article: http://www.businessweek.com/articles/2013-11-12/china-will-fine-tune-its-one-china-policy-says-family-planning-official

Football (soccer) is probably the most played and watched sport around the globe and the English Premier League(EPL) is without a doubt the most followed football league throughout the world and as a result it is the most broadcasted league on television in the whole world. It is therefore not surprising that channels everywhere are fighting to get the broadcasting rights for this entertaining championship. Especially in England where the league takes place but it is also where the competition for the rights is the fiercest between BSkyB, ITV and especially with the arrival of newcomers BT and their big snatch from BSkyB for the UEFA Champions League and Europa League, which are two of the most watched football tournaments around the globe.

With this newcomer, growing quickly and making a statement with the buy of the rights for the main two European tournaments, BSkyB will have trouble keeping the EPL rights (they have the rights until 2015-2016) and not get out bided by BT at the auction happening in mid-2015 as, to keep the rights, BT would have to bid an extra £1.2bn which would equal to £3.5bn. This amount of money is huge and will only mostly advantage the FA and therefore both clubs and players will be advantaged by this extra money for the broadcasting. So I will ask you readers the following question: is this “auction” system for the broadcasting rights, happening at the moment, the best way to attribute those rights? Shouldn’t those rights be given to the channels with the plan that will give the viewers the best entertainment and footballing experience possible?

My answer is that no this auction system is not the best way as this additional £1.2bn is not a small sum and the winning channel will have to cover this extra cost, and guess who will “suffer” from the repercussions? Customers will. Because instead of attributing the rights to the channels with the best plan the rights will be attributed to the highest bider: BSkyB or BT (ITV said they are not ready to pay the additional costs and are therefore out of the competition basically) and they will have to carry on the extra cost to the customers which is a tragedy because then english customers will have to pay extra to watch their passion: football.

Source: http://www.theguardian.com/business/2013/nov/11/bt-champions-league-deal-hits-bskyb-shares

Last Friday Standard & Poors downgraded France from an AA+ rating to an AA rating. This change made headlines of many newspapers around the globe, however, questions are arising in the economics world as of whether France deserved to be downgraded or not.

First of all what is Standard & Poors? S&P is a bond-rating agency and an index provider about a country’s economy. They evaluate a country’s economy and then gives it a rating, the rating goes as follow (from best to worst): AAA, AA+, AA, AA-, A+, A, BBB, BB, B, CCC, CC, C, NR.

The reasons why questions are arising around France’s downgrading is because even though S&P presumedly thinks that France is in a crisis or soon will be which is why they have been downgraded the economic datas around its economy shows that the borrowing costs are at historic lows, that, though slower, the country is still growing more than most other European countries even those with higher S&P ratings (e.g. Netherlands), productivity in France is higher than that of Germany and the budget deficit has been dropping since 2010.

Therefore given those stats I will be asking this: Why is France being downgraded if the numbers are showing no real sign of crisis?

According to S&P the reason is that the Government reforms on the whole economy, with the main one being the big tax increase, are unsustainable and unlikely to raise the country’s growth. However according to research done by the IMF (International Monetary Fund) shows that an increase in tax does a lot less damage in decreasing the budget deficit than a cut in spending would. For this reason it is confusing as to why France is being downgraded from an AA+ to an AA.

Source: http://www.nytimes.com/2013/11/11/opinion/krugman-the-plot-against-france.html?src=me&ref=general

What is this “écotaxe”? It is an environmental tax that is targeting all vehicles heavier than 3.5 tons. The general aim of such tax is to decrease the pollution generated on the roads of France and at the same time create the incentive for truck drivers to get more environmentally-friendly trucks. With the revenues generated by the tax the Government will invest in the projects that were voted at the Grenelle Environnement, an open debate that brings representatives of different industries to define public policies on environment and sustainability, that happened in 2007.

This tax, to start as of January 1st 2014, is supposed to raise up to 750millions of euros per year in revenues might be completely suspended due to the protests happening in different parts of France such as Brittany. So here is the question I ask you readers: Can a Government say no to such revenues which would be used to boost the country’s development especially in such financial times?

In my opinion the Government shouldn’t stop this tax as it will raise a lot of revenues, revenues needed for the growth of France and its objective to become a more sustainable economy. And I do not approve with the Government’s decision to suspend the tax all because of farmers protesting as they think they will be the ones hit by the additional transporting costs when they aren’t actually the ones who get hit the most, customers will suffer the most because the cost of the tax will be added on to the price of the product. Therefore they aren’t really the ones who should protest for this tax to be completely scrapped.

Sources: http://www.euronews.com/2013/11/10/france-fresh-protests-in-brittany-against-eco-tax/

http://www.developpement-durable.gouv.fr/Qu-est-ce-que-l-ecotaxe-poids.html

http://www.lejdd.fr/Economie/Combien-coute-la-suspension-de-l-ecotaxe-636353

Comment on Rohanne Taylor’s post: https://blogs.ubc.ca/rohannetaylor/2013/11/08/advertisements-finally-hit-instagram/

Nowadays one of the only way for such a popular mobile apps, such as Instagram, to be free is through in-app advertising from other  applications in the form of banner or pop-up windows. So far Instagram has been exempted from the massive flood of advertisement all over the app, however this is about to change. On November 6th it revealed its first advertisement on the news-feed and more than 5% of Instagram users actually pressed the like button on the advertisement.

In the blog post Rohanne is arguing the fact that an increase number of advertisement in-app is likely to frustrate the users at first but, as with Facebook, customers will get used to those advertisements and in a while they won’t even pay attention to them anymore. After reading his arguments I agree with his post, it is that the advertisements will not frustrate to the point that they will stop using the app. The reason for this is that the app has taken such a big place in users’ lives that this app is almost becoming a need for them and a couple little advertisements are very unlikely to make users quit.

Source:  https://blogs.ubc.ca/rohannetaylor/2013/11/08/advertisements-finally-hit-instagram/

http://www.theverge.com/2013/11/7/5076268/instagram-ads-are-turning-into-likes-five-percent-of-the-time

In the spring of 2013 more than 50 000 pigs carcasses were found in the Huangpu river not far from Shanghai. Some of the reasons why those pigs were dumped is because of the “crude raising techniques and extreme water” that killed the pigs and were then dragged away by the water, another reason is that the farmers just dumped the rivers instead of properly disposing of the bodies.

Those carcasses found in the rivers raised the question as to whether the cities’ waters were polluted or not even though the Chinese government says that the waters were fine, however, the Chinese government isn’t always telling what is really going on…

So, can we consider that the pigs being dumped is ethical or not?

First of all what are “ethics”? Ethics are the moral principles that govern a person’s or a group’s action.

The question above can be answered from two points of view: The farmers who dumped the pigs, who probably think that this is ethical as they are the ones who did it. The second point of view is the rest of the population and the government, they are the ones that are suffering the consequences of the farmers’ acts. They probably think that this action is highly unethical as it can cause more pollution to waters that were already highly polluted.

In conclusion I think that the farmers’ actions were highly unethical as they willingly ignored the country’s laws and regulations and took the risk of contaminated rivers that feed big cities with water used in everyday’s life

Article link: http://www.cnn.com/2013/03/13/world/asia/pigs-china-river/index.html