Category: Uncategorized

        This article faults Russia for being ‘unenvironmentally friendly’ while “the rest of the world is focusing on building an eco-friendly future”  (Sulminina). As discussed within the article, many Russian producers do not prioritize becoming environmentally friendly because the start-up costs are extremely high. Additionally, many Russian consumers do not value eco-friendly products, such as organic and locally grown foods. Another fault this article points out is that “the government has yet to sort out the legislation for sustainable development,. . .  even though the rest of the world is focusing on building an eco-friendly future” (Sulminina).

     All three major player (producers, consumers & government) seem to be influencing this environmental decision, and therefore it appears unlikely that Russia will change their environmental impact in the near future. Despite this, I believe a change in perspective of any of these ‘major players’ will forcefully impact others. For example, if consumers chose to switch consumption to more environmentally friendly products producers will be forced to modify production.

    Currently Mikhail Prokhorov is designing an environmentally friendly car to sell in Russia markets. Perhaps the production of this car will launch the ‘green movement’ in Russia by illustrating to both consumer and producers how such a change can be beneficial in both the long and short run.

SOURCE:

Sulimina, Anna. “Going Green.” Moscow News 16/08/2010 : n. pag. Web. 13 Oct 2010. <http://www.mn.ru/business/20100816/187986731.html

             Gap has recently introduced a new logo, a move which was met with huge criticism. The Article “Chatter: Gap’s black and blue logo” discusses some of the issues associated with this change and how they are being exposed via social media.  

     One of Gap’s main strength’s is their strong brand name; therefore, it seems peculiar that they are changing their logo. Perhaps it is a strategic decision to repositions their brand and change the company’s overall direction. In contrast, it could merely be a tactic to draw in new customers.

         Regardless of their motives for implementing the logo, it is interesting to look at how quickly the change triggered consumer response. Instant responses were posed via facebook and twitter.(1,2) Furthermore a specific website was been created which harshly criticizes gap and redraws the logo as ‘Crap’ (3). Due to the general negativity of these responses Gap is likely regretting their decision to change their previously well known logo. As stated within the article Gap responded to this negative social media by “announcing a crowd-sourced design contest, viewed widely as a classic case of branded backpedaling”. Perhaps this will give gap a change to ‘redeem themselves’ from this negative, and potentially harmful, social media.

 1.http://www.facebook.com/gapv=wall,  

 2.http://twitter.com/OldGapLogo/status/26679927090#).

 3.http://www.fastcodesign.com/1662446/the-gap-falls-into-a-new-logo

SOURCE: “Chatter: Gap’s black and blue logo .” Marketing Magazine Online October 08, 2010: n. pag. Web. 9 Oct 2010. <http://www.marketingmag.ca/english/news/marketer/article.jsp?content=20101007_193225_6200>.

     The article “Steel demand to hit fresh highs'” speculates that steel will rise by 13.1% in 2011. This estimated increases in the demand of steel must be a result of both increasing necessity (or perceived necessity) of the product and of speculation. First off, steel is not easily substitutable in many production processes, therefore, the demand for it is relatively inelastic.  This means that an increase in demand for the product is likely to be with a large increase in price (as this will allow suppliers to maximize total revenue).

    In addition, I suggested the second cause of increased demand is a result of speculation. As this article explicitly states, people are expecting demand for, and thus price of steel, to increase. Therefore many industries and investors are likely to ‘buy’ steel now as apposed to waiting until it is more expensive. This is likely to both accelerate and dramatize the problem of increasing demand for steel.  Subsequently steel prices could rise to an ‘artificially’ high level as they are currently very attractive to investors.

SOURCE:

“Steel demand ‘to hit fresh highs’.” BBC news 4 October 2010 : n. pag. Web. 5 Oct 2010. <http://www.bbc.co.uk/news/business-11464255>.

          “From Blockbuster to turkey”1, a recent article from the Economist, discusses how blockbuster is facing profit losses as a result of online competitors. This article, similar to “Welcome the new consumer” illustrates how technology is vastly changing markets. In present time Blockbuster has a very strong brand-name. They are therefore  able to rely on this brand-name to draw in a variety of costumers. However, as brands such as “Netflix” and “Amazon” become increasingly popular and well known, many customers are being ‘drawn away’ from blockbuster.

        Another point discussed within this article is that, as a result of technology, many companies are able to expand their  target market. For example online movie’s can be purchased in any country, regardless of where they are being sold. Blockbuster has been able to develop a relatively reputable online ‘store’ , however, it is not ‘up to standard’ with it’s major competitors. In turn, blockbuster has been able to increase their target market, however, they would like to do so to a greater extent.

The following diagram (2), although slightly outdated, illustrates blockbusters vastly growing online sector. As depicted, there  online sales are minimally lower than there in-store sales. This is likely very profitable as online sales require less ‘fixed costs’ such as rent.

SOURCES:

1. “From Blockbuster to turkey .” economist Online Sep 23rd 2010: n. pag. Web. 2 Oct 2010. <http://www.economist.com/blogs/newsbook/2010/09/blockbuster_files_bankruptcy>.

       2.  “Total Access Gives Blockbuster Credibility To Compete With Netflix.” Seeking Alpha January 25, 2007 : n. pag. Web. 2 Oct     2010. <http://seekingalpha.com/article/25069-total-access-gives-blockbuster-credibility-to-compete-with-netflix>.

       In the article, entitled “Welcome the new consumer”,  Alexandra Lopez-Pacheco suggests that, as a direct result of developing technologies, producers are experiencing ‘intense’ competition. This intense competition, caused by an increase in supply, is putting pressure on producers to better quality and decrease price.  In extension, globalization and online ‘stores’ allow consumers to have access to a seemingly infinite amount of products, which intern allows them to access more substitute products.

   In order to avoid being ‘beat out by the competition’ many companies will be forced to look at their break even point; to determine if they are able to lower prices and thus be competitive in today’s global market. In contrast, companies could try to differentiate their products in an attempt to detract customers from buying substitutes.

     One could extend this article to imply that, as a result of technology, a large biding war is occurring on a global scale . Weather or not this is beneficial depends on your perspective. As a consumer I believe this to be excellent, as it is likely to decrease the cost, and subsequently the opportunity cost, of purchasing a variety of products. However, from a producers perspective this increase in competition, causing a decrease in demand of various products, is likely to have a negative impact upon their ‘bottom line’.

Source:

Lopez-Pacheco, . “Welcome the new consumer.” Vancouver Sun 21 sept 2010: n. pag. Web. 26 Sep 2010. <http://www.vancouversun.com/business/smart-shift/fp/Welcome+consumer/3551652/story.html>.

    “Automatic reaction”, a newspaper article from the economist, suggests that as a result of technology many middle class jobs are being eliminated. This raises the ethical issues associated with corporations responsibilities.  From a corporations perspective technology is a great tool. (As it enables them to produce more goods whilst keeping production costs constant). Despite this, creating a larger divide between the upper and lower classes will negatively impact society. The question remains as to whether or not this negative impact should influence a corporations business strategies.  Personally, I feel that although this issue is impacting much of the western world, it is not up to individual corporations to create middle-class job opportunities. As Milton Friendman suggested “A corporation is an artificial person and in this sense may have artificial responsibilities, but “business” as a whole cannot be said to have responsibilities”

The graph below illustrates that middle class jobs are indeed being eliminated.

Source: “Automatic reaction.” Daron Acemoglu and David Autor. The economist sept 9th 2010: n. pag. Web. 15 Sep 2010. <http://www.economist.com/node/16990700>.

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