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