As described in lectures, social enterprises are firms that exist in order to provide a product or service while serving their respective communities in the social, environmental or cultural fields. However, one of the main aspects of these firms are to eventually retain profits. This does not take away from the firms social, environmental or cultural goals, but provides incentives for them to innovate their practices and in turn improve the standards for the fields they are interested in enhancing. For instance, if a firm exists for the purpose of cleaning the environment, all the while earning profits, their decisions to lower costs by purchasing less capitol and more labour – provided this lowers their production costs – can not only earn them higher profits but will create new jobs and reduce pollution on the environment (since machines are more likely to release pollutants than people). Although, certain professionals believe that newer methods may increase social enterprises’ chances of profitability. For example, a blog written on the Canada Business Network named How Social Media Can Be Used By Social Enterprises (http://www.canadabusiness.ca/eng/blog/entry/4364/)  explains that the use of online networking may improve these firms’ abilities to practice their environmental, cultural or social duties and to do so more effectively. The author states that social media can increase these social enterprises chances of “making partnerships…identifying financial contributors…recruiting volunteers with the right skills…crowd sourcing new ideas or solutions…[and] promoting [their] mission” (Canada Business Network 2013). Personally, I agree with these ideas because I see social media as a strong method of ensuring sustainability in the marketing aspects of companies which can increase consumer awareness. Also, since the goals of these firms are to improve social, environmental or cultural aspects of the regions they practice in, increased awareness can cause these firms to be more successful because then more people will actually be aware of what the firm is doing. In example, reconsider the firm whose aim was to improve environmental standards in their community; increased awareness of their goals can cause society to decrease their pollution (through correct marketing methods) or even increase the amount of volunteers the firm has. The former would decrease their costs since there would be less pollution to prevent, and the ladder would also decrease their costs since they would have to pay a lesser average for their labour costs. Overall, social enterprises must seek profits in the long run; the use of online networking can increase their chances of profitability and also causes them to innovate and improve their social, environmental or cultural duties.

Works Cited:

“How Social Media Can Be Used by Social enterprises.” Canada Business Network. Government of Canada, 7 Nov. 2013. Web. 17 Nov. 2013. <http://www.canadabusiness.ca/eng/blog/entry/4364/>.

Article URL:

http://www.canadabusiness.ca/eng/blog/entry/4364/

A lean start-up strategy is a somewhat newer concept (in the fields entrepreneurship and management) as opposed to its alternative, the more secretive business plan. As displayed in their article, the Lean Start-Up Strategy (https://blogs.ubc.ca/sayheytojae/2013/11/16/lean-start-up-strategy/), which examines the benefits of a lean start-up, Jaehsong mentions that methods such as customer/product research and agile development should be ongoing processes that should be practiced by firms not only during their start-up phase but throughout their entire existence. I personally agree with this idea because it ensures that even in this new day and age of technological improvement – which is expanding at an exponential rate – companies may protect themselves against changing markets and customer preferences when in the past they may have had to make drastic changes to their business model. Additionally, the fact that lean start-up’s prove to be less costly provides a significant advantage to firms who choose to practice through agile development; and a low cost firm will always have that advantage over its competitors. Therefore, the ever changing technological advances in today’s industries are suggesting that firms must always be assessing their position and products to ensure that they can adapt to constantly changing customer preferences. The lean start-up method is very effective at starting a company, but may also be extremely efficient as an on-going self-assessment process.

Article URL:

https://blogs.ubc.ca/sayheytojae/2013/11/16/lean-start-up-strategy/

An important common tool for business practices and financial safety is the break-even tool. Although it may seem like an application that may only be used by business students early on in their commerce career in order to understand corporate practices, the break-even tool is actually a significant concept which can cause many firms to realize what they are doing wrong or even some unnecessary costs they may have. For example, a company called McLaren had to withstand the same procedures. The exotic car company just recently entered the Formula 1 industry just over three years ago. Since their start-up, they had been incurring serious costs to an extent where they were losing money for a substantial period of time. However, according to an article on The Guardian, they made serious financial re-considerations which caused them to break even just towards the end of this calendar year. The author of the article, Angela Monaghan, stated that McLaren’s “Operating losses at the three-year-old business fell to £10.9m last year from £59.1m in 2011 and it expects to break even this year” (The Guardian 2013). Additionally, ever since the luxury automobile firm decided to cut costs and revolutionize their production methods, their demand has risen considerably: “Last year sales almost quadrupled to 1,587 cars from 400 in 2011, as the company benefited from the first full year of production of the McLaren 12C and the launch year of the 12C Spider” (The Guardian 2013). These immense rises in demand and decreases in costs are clear repercussions of the company’s use of the break-even tool. They realized that they must produce and sell a certain number of goods (A.K.A. luxury cars) in order to break even and did so based on their knowledge of the established demand for their product – they decided to build only “375 P1s, which cost £866,000 and can achieve 0-62mph in less than three seconds” (The Guardian 2013). Ultimately, McLarens proper use of microeconomic concepts along with the break-even tool caused them to not only break-even, but quadruple their sales in one year. The basic tools taught to students in Commerce 101 set the correct foundation for sustainable business practices and set the ground for successful careers in the future.

Works Cited:

Monaghan, Angela. “McLaren Drives down Losses and Expects to Break Even This Year.”The Guardian. Theguardian.com, 30 Sept. 2013. Web. 15 Nov. 2013. <http://www.theguardian.com/business/2013/sep/30/mclaren-losses-down-break-even>.

Article URL:

http://www.theguardian.com/business/2013/sep/30/mclaren-losses-down-break-even

One of the main aspects of profitability which lies in the heart of many firms’ internal maxims is employee productivity. Human Resources and Organizational Cultures within companies have a strong effect on the success of the firm and reflect highly on their profitability. Moreover, it is significantly cheaper for firms to retain their employees rather than hire new ones, so the companies that are effective at keeping their employees not only save a lot of internal costs in the long run, but also prove to be more productive. One may wonder why productivity is linked with employee retention. Well, this is directly related to Human Resources and Organizational Cultures. According to the article “Happiness at Work: Why Money Isn’t the Only Thing That Matters” on CNN’s Thinking Business, companies tend to offer their employees higher salaries or bonuses in order to persuade them to be more productive. However, according to Dr. Matthew Lieberman: “This is not a recipe for long term success” (CNN 2013). This illustrates that lying at the root of employee productivity may just be the simple concept of employee happiness and appreciation. Additionally, Lieberman goes on to state that “fair treatment, praise from others, and even the opportunity to help someone in need are all socially rewarding and activate the brain’s most primitive pleasure centers” (CNN 2013). The simple concept is: keep your employees happy, and they will be more productive than if you offer them monetary values. These concepts or ideas are directly linked to sustainable business practices and will ensure greater returns in the long run than the outdated methods of offering incentive’s (money). In Commerce 101, we learned about the methods used by the Human Resources departments of firms and how effective they can be in improving the firm’s productivity and decreasing costs/increasing profits. Evidently, employee happiness is a similar concept which lies under the same principles, and should be considered by managers more frequently.

Works Cited:

Lieberman, Dr. Matthew. “Happiness at Work: Why Money Isn’t the Only Thing That Matters.” CNN. Cable News Network, 31 Oct. 2013. Web. 15 Nov. 2013. <http://edition.cnn.com/2013/10/31/business/happiness-at-work-why-money/index.html>.

Article URL:

http://edition.cnn.com/2013/10/31/business/happiness-at-work-why-money/index.html

The concepts of Entrepreneurship and Social Enterprise are major aspects of business that are growing at an exponential rate. Regions such as Africa, India and parts of South America are proving to be the grounds for extreme potential in the entrepreneurship sector. Specifically, Africa has been the subject of hot topic as investors, entrepreneurs and corporations alike have been realizing the potential for significant profits in the region. For instance, there are individuals who have seized the opportunities and become what are called “Afropolitans” and “Afropreneurs”.  These are individuals who seek to make profits through the political and business aspects of the region. Among these entrepreneurs is a man called Tony Elumelu. He is an extremely successful business man in Africa and – according to an article on CNN – refers to himself as an “Afrocapitalist”. Elumelu’s definition of the term Afrocapitalist is the economic philosophy “that the African private sector has the power to transform the continent through long-term investments, creating both economic prosperity and social wealth” (CNN 2013).  This is a very good example of new ideas emerging in a place where a few decades ago there may have been the notion that there is low potential for growth. Furthermore, the concept of long-term private investments from domestic firms within Africa is extremely new and may bring about significant profits in its future. The fact that Elumelu was able to see this opportunity and apply his business skills to the region proves to be the right necessities for a successful entrepreneur. In Commerce 101, we have discussed the concepts of entrepreneurship and social enterprise and have even linked projects such as the ARC Initiative to our curriculum. What Tony Elumelu is practicing in Africa can be directly linked to the same concepts we have learned and is an evident case of success in the region.

Works Cited:

Nurse, Earl, and Jill Dougherty. “Tony Elumelu: The ‘Africapitalist’ Who Wants to Power Africa.” CNN. Cable News Network, 12 Nov. 2013. Web. 14 Nov. 2013. <http://edition.cnn.com/2013/11/12/business/tony-elumelu-africapitalist-africa/index.html>.

Article URL:

http://edition.cnn.com/2013/11/12/business/tony-elumelu-africapitalist-africa/index.html

In recent years, there has been a rise in cases of accounting fraud and other infringements of business morals due to dishonorable managing decisions made by certain companies in the United States. Among these cases is one which involves Citigroup Inc., a major American international financial services corporation based in New York. The firm is being fined $30 Million by a Massachusetts top securities regulator (BNN, 2013). This is due to the fact that they claim that a Citigroup analyst sent confidential and unpublished information in a report regarding Hon Hai Precision Industry Company (a major supplier of Apple Inc.) to firms such as SAC, Citadel and GLG partners (BNN, 2013). As stated by William Galvin, Massachusetts Secretary of the Commonwealth, the Hon Hai research report contained information implying that Apples production numbers were declining, and that this information may be detrimental to Apples performance (BNN, 2013). The illegal proceedings by the Citigroup analyst caused the three clients of the financial services corporation to make decisions on buying or selling their Apple stocks before this information was released to the public. This move may be against the regulations of the Generally Accepted Accounting Principles, since Citigroup is a publicly traded company in the New York Stock Exchange. Therefore, I strongly believe that the action made against Citigroup was properly done due to the fact that they clearly misused their responsibility and broke the laws set before them by the United States Securities and Exchange Commission (SEC).

Works Cited:

Herbst-Bayliss, Svea. “Citigroup Fined $30M after Analyst Sent Report to SAC, Others.” BNN News. Business News Network, 3 Oct. 2013. Web. 14 Oct. 2013. <http://www.bnn.ca/News/2013/10/3/Citigroup-fined-30M-after-analyst-sent-report-to-SAC-others.aspx>.

Article URL:

http://www.bnn.ca/News/2013/10/3/Citigroup-fined-30M-after-analyst-sent-report-to-SAC-others.aspx

A controversial topic usually revolving around the corporate world is ethics. The reason for this may be due to the fact that firms in North America are frequently committing unethical acts which usually hinder either the consumer or the firm itself. This posting is reflecting on a disreputable act committed by a dependable company. Cisco Systems is one of the most successful American born companies ranking number 60^th in the Fortune 500 list for 2013 (CNN Money, 2013). However, they have recently been under scrutiny from the media and the public. According to an article on The Huffington Post Canada, John Chambers, the CEO of Cisco Systems, has doubled his earnings from $11.7 Million in 2012 to $21.05 Million this year. In depth examination of this rise in the executive’s pay reveals that “in August [Cisco] was cutting 4,000 jobs to reduce costs and refocus on growth areas.” (The Huffington Post, 2013). This statement exposes inquiries on Cisco’s intentions on “growth areas”. Does this mean the CEO’s earnings? The report proves to be extremely controversial since cutting thousands of jobs in order to improve one individual’s earnings can be considered as unethical and simply unreasonable. The company explained that these job cuts actually came from the current increase in competition from Juniper Networks Inc., Palo Alto Networks Inc., and Checkpoint Systems Inc., which have caused Cisco to decline in the network securities market in the past few years (The Huffington Post, 2013). However, to consumers and professionals alike, it may seem a little odd that a CEO’s income would increase due to a rise in competition from innovative rivals. Wouldn’t it be more sensible for it to decrease if the firm was performing poorly? A sensible concept for companies in The United States (especially companies in the top 100 of Fortune 500’s list) to realize would be that committing such seemingly unethical acts doesn’t just hinder their own reputation and competitive standing, but equally the economy of the nation.

Works Cited:

Reuters. “Cisco CEO John Chambers’ Pay Nearly Doubles To $21.05 Million.” The Huffington Post. TheHuffingtonPost.com, 30 Sept. 2013. Web. 02 Oct. 2013. <http://www.huffingtonpost.com/2013/09/30/john-chambers-salary_n_4019346.html?utm_hp_ref=canada-business>.

“Fortune 500 2013: Full List.” CNNMoney. Cable News Network, 2013. Web. 02 Oct. 2013. <http://money.cnn.com/magazines/fortune/fortune500/2013/full_list/>.

Article URL:

http://www.huffingtonpost.com/2013/09/30/john-chambers-salary_n_4019346.html?utm_hp_ref=canada-business&ir=Canada%20Business

In depth analysis of the effects that product positioning has on a firm has led me to stumbling upon an interesting story; one which provides a clear example of the concepts of segmentation, points of parity and points of difference that a firm utilized to their advantage over smartphone power Apple. Xiaomi is a Chinese company that sells smartphones that are creating complications for many of their competitors due to their business model strategy. They are essentially the iPhone of China. Instead of providing their product to customers through retail stores or other types of network operators, they sell their phone to the consumer directly online. This creates a massive cut in their expenses. Furthermore, the way they make their profits is not through the direct sale of the phone, rather through the products and services they provide through their online network that is accessed exclusively through the phone (The Economist, 2013). Therefore, it is apparent that Xiaomi has effectively found a proper segmentation strategy by realizing the consumers need for smartphones in china and implementing a strategy to sell their product there. Secondly, the Chinese company have revealed to the public that they have points of parity with their competitor apple by creating a similar, sleek, user-friendly device that has similar features of the iPhones operating system; in some cases, they have actually been accused of physically copying the iPhone itself (The Economist, 2013). However, another effective strategy that Xiaomi has executed is the points of difference from the iPhone that they have presented to the consumer. For instance, as stated by the author of the article on The Economist, “Another big difference is [Xiaomi’s] openness to user feedback. Apple takes an almost Stalinist approach to its handsets, limiting user customisation in favour of a “we know best” design philosophy. Xiaomi is more guided by its users, releasing a new version of its MIUI software (based on Google’s Android operating system) every week in response to their suggestions” (The Economist, 2013). By this point, it is clear that the Chinese smartphone company has effectively established a correct business plan in their segment, and have been successful at it in the meantime. For example, According to Rajeev Chand of Rutberg, an investment bank, Xiaomi is now one of the 15 most heavily venture-backed mobile start-ups ever (The Economist, 2013). Ultimately, a strong implementation of points of parity and difference, along with an effective segmentation strategy are evidently keys to success for new firms.

Works Cited:

“Smartphones in China: Taking a Bite Out of Apple.” The Economist. The Economist Newspaper, 14 Sept. 2013. Web. 1 Oct. 2013. <http://www.economist.com/node/21586344>.

Article URL:

http://www.economist.com/node/21586344

After learning about the impacts that inventory days and demand research can have on a business, I decided to look further to find a real life example of a company who has been drastically affected by such factors. An article posted on The Economist described the downfall of the once known Research In Motion (RIM) company now referred to as Blackberry. To any business fanatic, it is by now common knowledge that Blackberry has been on an intense collapse in the past three years. After their diminishing popularity in the smartphone market and recent decline in their share prices and value, the Canadian firm is on the verge of being bought out by private investors. There is currently a $4.7 Billion deal being worked out that aims to make Blackberry go private (The Economist, 2013). This would make Blackberry join the ranks of Motorola and Nokia who both also sought help from larger, more successful companies in order to stay on their feet (The Economist, 2013). It is evident that Blackberry requires this help since they reported that their revenue from the three month period of May-August in 2012 as opposed to this year has been reduced by a half; From $2.9 Billion in 2012 to $1.6 Billion in 2013 (The Economist, 2013). Although experienced economist and business professionals can decipher the causes of Blackberry’s recent downfall, others may wonder what exactly could have brought about their unfortunate decline in the smartphone industry. In my opinion, other than the fact that their main competitor Apple has been more innovative in recent years, Blackberry made costly mistakes with their inventory and demand forecasting. For example, the Canadian firm recently revealed that “it will write down some $960 Million worth of unsold phone inventory in its latest fiscal quarter” (The Economist, 2013) as according to The Economist. This is almost a quarter of their projected worth! To my understanding, this problem may have been brought about due to the fact that they were not as innovative in their demand forecasting and as efficient in their inventory days as their competitors. These astounding results lead me to believe the significance of an efficient business model and inventory days that companies must maintain.

Works Cited:

“Blackberry – Time For Plan Z.” The Economist. The Economist Newspaper, 23 Sept. 2013. Web. 30 Sept. 2013. <http://www.economist.com/blogs/schumpeter/2013/09/blackberry>.

Article URL:

http://www.economist.com/blogs/schumpeter/2013/09/blackberry

When discussing the subject of modern big-business, the concept of ethics usually comes into question. Whether it is a firms social responsibilities or its inner politics that are being evaluated, it is important for companies to understand that they are always under the watchful eye of the public. One article, from The Economist, caught my attention as it illustrated the unethical actions of the four largest banks in China. The article explains how the banks dishonestly worked their way to the top of global rankings by means of ”murky accounting, off-balance-sheet transactions and dodgy lending” (The Economist, 2013). Furthermore, the author goes on to describe how the banks are essentially so under control of the government that they are ”Cosseted by rules that protect them from competition, [and thus] they deliver huge profits” (The Economist, 2013). The examples presented in this piece effectively share the idea that the Chinese banking institutions are practicing unethical methods of banking. Ultimately, their credentials are being brought into question by myself due to the fact that if they were to be practicing in a free market system, there would be minimal to no government intervention.

Works Cited:

The Economist. 2013. The Economist. [online] [Accessed: 12 Sep 2013].

Article URL:

http://www.economist.com/news/finance-and-economics/21584331-four-worlds-biggest-lenders-must-face-some-nasty-truths-giant-reality-check