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 This is due to the fact that they claim that a Citigroup analyst sent confidential and unpublished information in a report regarding Hon Hai Precision Industry Company (a major supplier of Apple Inc.) to firms such as SAC, Citadel and GLG partners (BNN,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