It is no doubt that Netflix has become a major competitor in the television industry, against traditional network television and also service providers like Dell, Shaw cable etc. In reply to Sahir’s blog quoting Netflix serves as a “kick in the butt” for these other competitors to increase quality of service, I think that Netflix serves as more a disruptive innovation. Through the invention of home viewing on-demand technology, consumers now have the leisure to view programs whenever they please, no longer needing to follow the schedules of network television channels, and for $8 per month too! Consumers now has a broader choice of shows for lower fees, how will network television compete?

Well, for starts, although Netflix has a wide range of shows and movies, most of them are not updated. There are limited episodes and seasons for certain shows, or that the new ones have not been added yet, you can only watch the same movie so many times before it gets boring. Network television began exclusively broadcasting new shows under their channel, which Netflix viewers will not be able to get, or can only gain access to long after it comes out.

Secondly, programs such as live shows, and the news, Netflix would not be able to get (immediately, as least) which is one, perhaps the biggest advantage cable has over Netflix. Having Netflix is just like having a personal library of recorded shows, but it can’t replace network television where it is more live. Views would still need Network television to watch the daily news or the Grammy’s.

Lastly, to defend against the threat of Netflix, many service providers now offer DVR service as a standard feature and fast forward to skip ads in between the breaks of the show, minimizing the annoyance of advertisements and missing shows (reasons) to viewers, and therefore preventing them from switching to on-demand service like Netflix.

So despite Netflix being a disruptive innovation, I think through some improvements, cable will survive. Majority of consumers will still rely on network televisions for live TV and updated shows, and may decide to have both cable and Netflix. The two might not be direct competitors and affect each other’s revenue streams.

Photo Credit: https://www.google.ca/search?q=network+television+vs+netflix&espv=2&biw=1242&bih=599&tbm=isch&source=lnms&sa=X&ei=yqFiVMj7L9LIsQSn4oCQAQ&ved=0CAgQ_AUoAw#facrc=_&imgdii=_&imgrc=jg3kGXUXk7WNtM%253A%3Bvl7HnRnGFcN0xM%3Bhttp%253A%252F%252Fimages.kpopstarz.com%252Fdata%252Fimages%252Ffull%252F79915%252Fnetflix-news-2013-streaming-internet-television-network-to-launch-in-the-netherlands-late-2013-offers-1-billion-hours-of-tv-and-movie-shows.jpg%253Fw%253D600%3Bhttp%253A%252F%252Fwww.kpopstarz.com%252Farticles%252F31860%252F20130619%252Fnetflix-news-2013-streaming.htm%3B500%3B302

Reality TV star Kim Kardashian is more an entrepreneur than most might think. This Forbes article talks about the success of her latest  attempt in branching out her business empire, luanching Kim Kardashian: Hollywood, which is a game on the Iphone app store where you can basically simulate the life a celebrity. The media anticipated its popularity, but what is surprising is that the game earned roughly $200 million dollars in revenue despite the app being free. Kardashian was able to make a 45% profit which meant she profited $85 million! More than any of her endorement profits all year!

The numbers are certainly surprising, but I am more impressed with how successful the star was able to utilize her branding. Through her fame in reality TV, she was able to expand her brand into a clothing line, fragrance line, fitness and other endorsements. Most may not agree that she is a savvy business woman, but I think that she is able to do what most businesses fail to achieve, effective branding and marketing. The star has a massive fan base and even those who are not fans pay attention to her. Her game was able to target the desire to become a famous celebrity in young people. Personally, I could tell you that it’s a fairly addictive game and I could see why it is so popular.

Other celebrities just might follow suit on this idea to develop an app based on their branding, but they might not be as successful because they do not have a strong media presence as the Kardashians.

Photo Credit: http://www.google.ca/imgres?imgurl=&imgrefurl=https%3A%2F%2Fplay.google.com%2Fstore%2Fapps%2Fdetails%3Fid%3Dcom.glu.stardomkim&h=0&w=0&tbnid=7rc-fJRk7TWomM&zoom=1&tbnh=177&tbnw=284&docid=GjJTnf1cTm_7nM&tbm=isch&ei=hmpiVNagIsPfoATj6oKwAQ&ved=0CBAQsCUoBA

In reply to Deacon’s blog on the first week sales for IPhone 6, his blog discusses the possibility of Apple losing its competitiveness to other smartphone companies due to its lack of originality on its “new” IPhone 6 features. While I certainly agree that, function wise, Samsung could potentially be more advance, I do reject the argument that Apple could “fall off the high chair in the world of technology”. Despite that there are many features on the new IPhone 6 that has already been present in other models of smartphones such as Samsung’s and HTC’s. But there are other reasons why consumers would be drawn more to the IPhone despite that competitors have more (in terms of quantity) features on the device.

Firstly, a major differentiation for many users in IPhones are its fluidity, the entire platform of the device presents itself in a way that is more direct to the user. One is able to see all it’s apps at a glance instead of having to enter into different menus, better for users who are looking for more convenience. Whereas for Samsung, one may have to navigate to different menus to access to a certain application. Having many functions on the screen might actually confuse users.

Speaking of applications, the Apple Appstore remains the largest application store compared to its counterparts, like the Samsung Playstore. Many applications are exclusively on the Appstore and nowhere else, users will likely be more attracted to purchase the IPhone 6 due to its larger (free!) app library. Because more developers will likely to develop apps for the Appstore first due to the larger customer segment, before it launches an Android version for the Samsung, what the Samsung Playstore will have, Apple will definitely have it too.

Lastly, Apple has a large fan base that cannot be compared by Samsung. Apple has position itself as a leader in the smartphone industry and is unlikely to be knocked out by Samsung, or other smartphone companies, similar to what we’ve discussed. Other non leader firms spend more time developing features that are better than the IPhone, but Apple is still able to enjoy its leader advantage.

Having been both a Apple and Samsung user, I could easily tell you that I prefer the IPhone better for the reasons mentioned above. In my opinion, the IPhone will stay a top competitor in the smartphone industry for as long as it satisfy its enormous fan base. Android phones will be unlikely to take over Apple users in the foreseeable future.

Photo credit: http://recode.net/2014/05/11/happy-mothers-day-iphone-comic/

In a Huffington Post Blog Diamonds are Bullshit, author Rohin Dhar debunks the myth about the rarity of diamonds. Diamonds are the world’s most popular and sought after gemstone, to some, it is a mere display of affluence, to others it represents the longevity of one’s love to another.

Whatever the case may be, diamonds are the most profitable gemstone in the world not because of how rare or precious it is, but because diamond juggernaut DeBeers said so. Since the late 30’s, DeBeers started massively advertising diamonds as a rare commodity, prior to that, it was actually not popular American traditions to propose with a diamond ring. DeBeers was so successful in its marketing that it lead the entire culture to believe that diamonds are a precious gem stone, and even a century later, the mass still undoubtedly believes it. By carefully restricting the flow of supply, the firm was able to create an artificial ‘rarity’ to diamonds and skyrocket its prices.

The common misconception contributes to DeBeers large profits, and also the firm’s monopoly in diamonds. I am curious as to how can DeBeers maintain its monopoly power for nearing a century? What is preventing other firms from entering this market? It is very impressive to see how effective the campaign for diamonds in 1938 was , and that it would forever engrave the importance of diamonds into mass culture. DeBeers was able to target the strong desire of luxury goods for the wealth and the vanity of average purchasers to market diamonds towards the mass. Because even after knowing how common and worthless diamonds are in terms of intrinsic value, most people would still  regard diamond as precious as before.

External Blog Credit: http://www.huffingtonpost.com/rohin-dhar/diamonds-are-bullshit_b_3708562.html

photo credit: http://queconque.com.mx/wp-content/uploads/2012/04/marilyn_monroe_diamonds_are_a_girls_best_friend.jpg

 

On Thursday, insurance company Genworth had a major crash on Wall street after its quarterly report announced that it had underestimated its losses after realizing that people on their insurance plans are living longer than they’ve anticipated. Claimants are able to take full advantage of their plan mainly on costs such as living assistance, nursing care and hospice, expenses which are all covered by the insurance company, this resulted in a major loss in profit of $844 million dollars for Genworth.

I thought this is interesting how this is very similar to the case we’ve explored in class where we talked about legacy cost with GM underestimated the enormous profit loss it would have from pension pay outs and high employee retirement funds that was promised to employees decades ago. The executives at the time did not consider the financial consequences it would have on GM years later when those costs finally occur all at once. Similarly in the case of Genworth, decision markers in the company did not anticipate that, with better health care, the average life span of Americans were being prolonged. Genworth  failed to predict  the extent and the margin impact of any methodology and assumptions made previously, and is unsure what its next steps are going to be when faces with this huge profit loss. With all this uncertainty investors are losing confidence in Genworth and causing a huge plummet in stocks.

My prediction is that even if Genworth changes its current policy and the life margins of its insurance, the consequences of the loss in profit will still deeply hurt the company in the near future, because they are unable to change any of the occurred contracts and would have to pay the claimants as long as they live. And investor confidence would have to be rebuilt by really impressive quarterly reports after this depressing news.

Photo credit: http://www.businessinsider.com/genworth-financial-shares-crash-november-6-2014-11

Yet another dispute on the issue of resource exploitation and land, between a mining company and a First Nations group. The potential New Prosperity mine project at fish lake may be scrapped due to a supposed land violation of the Tsilhqot’in people’s claim on the area as a tribal park. 

The $1.1 billion copper-gold project came to a halt after Tsilhqot’in people declared the area to be a part of their land. Whether or not the claims of their declaration are valid, Native land has long been a sensitive issue that natural resource companies are hesitant to act upon. This is an external threat factor (on the SWOT analysis) that could potentially harm the project and the company’s revenue. Due to the fact that aboriginal issues are highly regarded especially in British Columbia, it is also a distinctive cultural/social issue. Even if their tribal park claim deems invalid, this still might become a loss for the company from years of court disputes and law suits. Another important factor is that this is also a environmental issue which the company must deal with very careful to avoid any type of consequences. Needless to say that mining will exhaust the ecosystems around it, which in the long run, may cost the company more resources to take preventative measures to damage the lands, especially where the First Nations group depend on their abundance of natural resources to thrive. There’s no way around the issue of aboriginal land disputes, except to negotiate the First Nations and hopefully work out a solution that is beneficial to both parties. The fate of the New Prosperity mining project remains undetermined.

 

image: http://www.vancouversun.com/business/2035/mine+opponents+fight+survival/8880792/story.html

Luxury shoemaker Jimmy Choo is debuting plans for an IPO on the stock market that could value up to $1.3 Billion dollars, in order to fund its expansion in Asia. The brand has been bought by German investment firm JAB in 2011. The brand has long been a high end favorite since its creation, its retail price ranges from $600 to $4000 for a pair of shoes, worn by royalties and celebrities alike.

The interesting thing about this article is that it relates to one of the topics covered in class about IPO, Initial Public Offering. JAB has agreed to a float of public stake 25% in the London Stock Exchange. This is an excellent example of a company with strong branding emerging in the stock market that could be a enormous success. The fact that shoes are among one of the fastest growing segment in the luxury market, and Jimmy Choo is undeniably a global, recognizable label, going public is a wise decision.

Also, the company is hoping to raise $400 million dollars for its expansion specifically targeted in Asia, opening up 10 – 15 stores a year could impact its revenue stream in the long run depending on how popular the brand becomes. It initially opened its first stores in London but its trend was spread to the US due to high exposure by celebrities and TV show.

 

Article Source: Jimmy Choo Is Planning An IPO To Fund A Massive Asian Expansion

Read more: http://www.businessinsider.com/afp-jimmy-choo-unveils-london-ipo-to-fund-asia-expansion-2014-9#ixzz3FKRwJL83

 

 

while doing some late night net surfing, I stumbled upon this interesting article about The $1,078,000 Reason Every Pop Song Sounds the Same. This article reveals the commercial reason behind the trend that every pop song out there is getting more and more homogeneous. With the same four chords, it seems that record labels and songwriters are getting less and less creative with music. The article compares the 1% of the financial and economic equity issue with a similar situation in the music industry. Only the most popular artists at the moments can afford the best songwriter, beat makers to ensure that it has the perfect “pop veneer” that is sure to make a hit. Record labels are making a lot less money than they use to due to piracy, therefore less willing to take the risk to give new songwriters.

There is a lot of investment that record companies put in to making sure that their songs are guaranteed a profit. Singer Rihanna’s popular single “Man Down” costed an estimated $1,078,000 to produce.  Of that, approximately a million goes towards marketing the song, putting in on the radio, movies trying to gain exposure. Which is surprising, my knowledge about the marketing behind the popular music we listen to was very naive. Why does a already popular artist’s song need to be marketed? Shouldn’t artists sing their own creation and let the mass audience decide whether if it is a good song or not? My assumption after reading this article is that, big record label companies are not willing to risk losing profit to invest in new artist and new music, but rather heavily invest in those who are already successful in the industry and requiring them to sing what is only mainstream and ‘pop-like’, and therefore creating less diversity despite having new technology to do so. In my opinion, behind the glitz and the glam, the music industry is struggling. As consumers, we could change this by reinvesting our purchasing power so that record companies have the incentive to diversify the type of music they produce.

Although it’s been nothing compared to the Iphone 6 announcement in September, there has been some buzz around the market of the new Blackberry Passport release, which raises some questions about whether or not the Blackberry Passport can help the company make a comeback into the competitive smartphone industry. Its no news that the Canadian phone maker has become irrelevant to the game in the last few year, and reviewers of the Passport has not been helping its declining reputation either. I Personally, thought it was interesting to note that there are several major contributing factors to why it’s nearly impossible to revive Blackberry at this point, relating back to several key ideas that we’ve discussed in class.

For one, Blackberry can’t seem to convince App makers to write any apps for the Blackberry App store, compared to Android OS and Apple, Blackberry has a meager 100,000 app count. The most popular apps currently such as Instagram, Vine, YouTube, and Google maps doesn’t even have an official App program for the Blackberry. Which greatly reduces its competitiveness against Androids and Apple.

Secondly, one of Blackberry’s competitive advantage used to be the BBM for instant messaging, but in the recent years new instant messaging platforms such as Whatsapp, Facebook  Messenger and Wechat has become widely popular especially on the Android and Apple devices, with even more advanced features than BBM, therefore making it more difficult for Blackberry to retain its subscribers.

Lastly, the change of consumer preference in the last few years has evolved towards touchscreen handheld devices. The keyboard for Blackberry just isn’t as impressive as it used to be. The most popular phones on the market currently are all touchscreens only, reviewers actually find the keyboard on the blackberry to be a nuisance rather than a feature.

Blackberry’s attempt at a differentiation strategy seems to be driving consumers away rather than the opposite. Its highly unlikely that the Blackberry Passport, in my opinion, be any more different than the Z10 or Q10 launch of last year. It doesn’t look like it will make an impressive comeback any time soon, not in 2014 anyways.

 

 

Image Link : https://www.google.ca/search?q=blackberry+passport&espv=2&biw=1242&bih=606&source=lnms&tbm=isch&sa=X&ei=vEUnVLzPA6ryiwKd44Ag&ved=0CAYQ_AUoAQ#facrc=_&imgdii=_&imgrc=QB1tnPjFaCe8YM%253A%3BTLt3SdzfsNpW9M%3Bhttp%253A%252F%252Fwww.oneclickroot.com%252Fwp-content%252Fuploads%252F2014%252F09%252Fblackberry-passport-3.jpg%3Bhttp%253A%252F%252Fwww.oneclickroot.com%252Fmobile-oses%252Fblackberry-passport-released-is-it-a-legitimate-android-competitor%252F%3B770%3B433

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