After reading numerous blog posts about Snapchat reportedly turning down a 3 billion dollar acquisition from facebook, I have began to think about it from Facebook ‘s perspective. Only a year ago they paid a whopping billion for instagram in what seemed like a huge deal, but there are again sparing no expense. They even created their own version of snapchat called facebook poke that arguably has better features but saw little success (still available in the app store). So what was in it for Facebook?

In their most recent earnings report Facebook announced that it is seeing a decline in usage from its younger user bases. This news is quite troubling since the younger generation usually signals many emerging trends. The problem could be that Facebook is now too widespread. Yes, their biggest strength became a weakness, simply because as the parents the younger generation begin to adopt and use facebook, youth find it more difficult sharing their activities under watchful eyes. Instead they opt for a much more private and personal service such as Snapchat.

This case shows some key characteristics of the technology industry. A company’s value is not based on the quality of the product but rather the number of users. Firms can grownincredibly fast, but at the same time the danger of something “going outing fashion” is always on the horizon. Perhaps that’s why Facebook is willing to pay so much for a company that isn’t even profitable yet.

I recently read Xin Jiangs blog on Foxconn’s business practices (https://blogs.ubc.ca/xinjiang/2013/09/11/business-ethics/) and it got me thinking on Sony’s recent PS4 release. More specifically, a report in which interns claimed they sabotaged some of Sony’s new PS4 gaming consoles because they were being treated poorly at work. From a company not know for treating their employees well, this report does not seem to be farfetched. It highlights the importance of providing a safe and positive working environment for company employees.

In contrast a company like google allows its employees to take breaks and play sports among other things. Although the two companies are hardly comparable in the tasks of their employees, it does show that good company citizenship is valuable at any level. If the reports turn out to be true Foxconn will likely suffer another blow to not to its image but their reliability as well. However, big companies should know the risks of using the manufacturing giant as a supplier by now.

In response to a blog post on the Economist (http://www.economist.com/blogs/schumpeter/2013/11/tesla-motors)

After Tesla’s founder and CEO Elon Musk said “The stock price that we have is more than we have any right to deserve”, the stock plummeted from $170 to $135 in a few days. The recent fires in its award winning Model S electric vehicles have been troubling for both the company and investors.

Tesla also admits that it having some issues in its supply chain involving shipments of the batteries they use in their vehicles. Their newly opened distribution networks in Europe are only going to further strain the supply. However there are some bright spots for tesla as its revenue has increased dramatically in the same quarter last year, up to 431 million from 50 million. Although they are still running at a deficit, Tesla is in a growing market, it’s the speed of the growth that investors are worried about. Growth has been good, but not great; though the Model S has been popular among higher income households.

Tesla will need to overcome some major problems going forward, but if they are able to overcome them, they will be poised to make a major disruption in the automobile market.

Recently blackberry launched it’s popular messaging app, bbm, for ios and android. There’s no doubt that it’s off to a good start with over 5 million downloads in the first few days. Yet many people are wondering why blackberry, a waning technology company, would make a move to make what is widely regarded as the best feature of its bb10 devices available to Ios and Android.

Messaging is a unique feature, different from other software features because exclusivity is not a selling point. In fact a messaging application is only as good as the number of users it has. Whatsapp is not as abundant in features as other messaging platforms on the market but it has 400 million users worldwide. Perhaps then, blackberrys move is not focussing on trying to differentiate its product, but rather an effort to try to keep it’s remaining customers.

When it was released bbm was faster, more abundant in features and functional than competitors. But at some point, mobile messaging took off while BBM was left behind in its Blackberry world.  BlackBerry was caught idling by the iPhone, and the same thing happened to BBM with the latest generation of messaging apps. BBM’s move to cross-platform is as necessary as it is late.

Starbucks reported Q4 earnings of $0.63 per share, beating expectations for an EPS $0.60 per share. The company reported earnings of $3.8 billion, just of expectations for $3.81 billion. Global store sales were up 7%. Yet, as promising as Starbucks stores have been, the coffee giant is looking for new frontiers to expand its business.

Last week Starbucks opened a Teavana tea bar in New York City; the first step towards creating what it hopes will be a counterpoint to its enormously successful coffee chain. Before being bought by Starbucks last year, Teavana had primarily been known for retail shops that sold tea and supplies without serving the drink.

This example shows how proactive Starbucks is in their strategy. The fact that they are creating a whole new line of stores instead of adding teas to their current stores shows that they want to market this product differently. They even decided to design an entirely different cup. Starbucks says they believe there is $90 billion in the “global hot and iced-tea category” and they are are taking a bold step with their new tea store concept.

http://www.economist.com/blogs/schumpeter/2013/10/americas-tea-revolution

Monsanto is an American multinational Chemical, and Agricultural Biotechnology corporation. They have over 100 years of history in chemical production and being among the first to genetically modify a plant cell and conduct trials on genetically modified crops. Today Monsanto’s business consists mostly of producing agricultural seeds and weed killers for farmers. So it came as a surprise when Monsanto recently acquired the Climate Corporation, a company that provides highly accurate weather prediction and farm crop insurance for 930 million USD.

However, this can be seen an effort to broaden their services for their target market. Just as Google provides many services such as Gmail, YouTube, and Chrome to supplement their advertising business (96% of their revenue in 2011), Monsanto wants to create a comprehensive service, from the purchase of the seeds to the final product. With these newfound capabilities they will be able to help farmers monitor their crops 24/7. Climate Company’s insurance business will be put to use as well. With his new acquisition, Monsanto will be further specializing in its business by broadening its services.

http://www.theverge.com/2013/10/10/4823004/monsanto-bets-the-farm-on-big-data

For weeks now, there has been excitement over China’s new experimental free trade zone in Shanghai. On September 29^th a 28-square-kilometer Free Trade Zone was opened in China’s largest city.

“The State Council said foreign and private companies would soon be allowed to invest freely in banks, shipping ventures, travel agencies and health and medical insurers that are set up in the experimental zone” – New York Times.

In the past there have been the case of Shenzhen, a designated special economic zone that was a major success, which lead to the opening of China’s economy. The new free trade zone represents China’s move to further internationalize its economy and currency. The government continues to try to create policies that will perpetuate its fast growing economy. In the future Shanghai could surpass Hong Kong as biggest business city in china. For international economies this means there will be a lot more opportunities for foreign investment in China.

If Shanghai is a success, it could lead to the implementation of similar policies in other parts of China. In the long run, it could mean easier flow of money in and out of China, showing that China is really “open for business.”

http://www.nytimes.com/2013/09/30/business/international/experimental-free-trade-zone-opened-in-shanghai.html?_r=02

When Apple released it the iPhone 5C in September, many expected it to be a low cost alternative that Apple could use to break into emerging markets. However, the retail price of the 5c is $549 (off contract) only $100 dollars cheaper than the 5s (US prices). The phone is by no means “cheap” either, as the build quality is up to Apple standards in every way, the only difference being the internals and choice of materials.

Looking more closely, there was something missing at this year’s iPhone announcement; no new iPods. The iPod was once the face of apple but in July this year apple reported that sales of its iPods were down 31% from last year. This number may seem concerning but it also reflects a change in the marketplace for smartphones. Over the past year American and Canadian telecom providers have created family shared plans that make it easier for parents to buy smartphones for their children. These are the same children that Apple targeted with their iPod touch line of products. In fact, smartphone usage among teens (ages 12-17) have increased of the past few years and are expected to climb even more in the future. So perhaps the colourful iPhone 5c wasn’t made for the low cost segment of smartphones, but rather a product targeted at new rising demographic of smartphone users.

http://store.apple.com/us/buy-iphone/iphone5c

http://www.slashgear.com/ipod-sales-down-31-from-last-year-gets-no-mention-from-apple-23291528/

Recently Verizon announced their decision to stay out of Canada, in what would have been a major event for the Canadian telecommunications industry. Currently the Big 3 Canadian telecom providers, Rogers, Bell and Telus occupy 90% of the industry’s market share. The government has been avidly trying to increase completion in the industry as Canadians pay among the world’s highest fees for cell phone service. However, there is a dilemma. Should the government allow foreign companies to invest and expand in Canada, thus compromising the interests of Canadian companies? Does the government even have a right to interfere with businesses.

Well, there are positives and negatives to allowing large foreign companies establish themselves in Canada. Consumers would definitely benefit. The scale and capital Verizon would be able to challenge the market dominance of the Big 3. Consumers would have more choice and prices of cell phone plans would likely drop as a result. Yet, many Canadians are against yet another American corporation entering Canada. In a poll conducted by Nanos research, 70% of respondents said Canadian companies should be favored when the Government was auctioning wireless spectrum. For now, this can only be seen as a victory for the Big 3 in Canada, as consumers will have to continue to pay a premium for service.

http://www.crtc.gc.ca/eng/publications/reports/PolicyMonitoring/2012/cmr5.htm

http://www.engadget.com/2013/09/03/verizon-shelves-canadian-expansion/

Over the past few years, attention towards the ethical production of crops has become a major focus of environmental groups. Chiquita, an American multinational distributor of bananas and other produce, has taken strides to appease environmentalists. The company has signed and adhered to a global agreement with local and international food unions and adopted sustainable farming techniques. In 2011, Chiquita responded to a campaign by ForestEthics by agreeing to avoid oil from the Canadian Tar sands for use in their transport vessels.

However, the recent times have been turbulent for Chiquita. While social activists were pleased, Canadians were discontent over the loss of revenue and their share price has been in decline. The costs of maintaining such policies are also eating into their profit margin. Their failure to reap rewards with their efforts is concerning, as other large suppliers such as Del Monte and Dole look on, wondering if there is any value gained from operating more responsibly.

I see this situation as a failure to properly market their commitments to customers. It shows that even if a company tries to become more ethical, they must also incorporate into their brand image through marketing rather than leaving their efforts as lone incidences of goodwill. Their labels should indicate the ethical practices that were used, so that stakeholders such as consumers and environmental groups, can both appreciate Chiquita’s noble intentions.

http://www.economist.com/node/21551500