Carolina's Blog

When I saw that part of our class twenty preparation was to write a blog post about the Arc Initiative, I was very excited. I actually found out about Arc last year when I met Jeff Kroeker at a Sauder open house, and the second he told me about it I was very intrigued. Back then, I thought it was an amazing project that I knew I would eventually like to get involved with, but now after two months of Commerce 101 I can see how the social enterprise ties together many of the key concepts that we have learned so far.

One aspect of the Arc Initiative that I really like is how personal it is, as demonstrated by the articles in the Globe and Mail as well as the Sauder website. I like how real students travel to developing nations and have a real, long-term impact on local entrepreneurs. I was particularly inspired by Arielle Uwonkunda, a current Sauder student who is in the process of trying to bring Arc to Rwanda, her home country. I think it would be amazing to one day work towards bringing the Arc Initiative to El Salvador, the country that most of my family is from. I really respect and admire the work that Jeff Kroeker and everyone involved have put into the Arc Initiative, and I hope to one day be involved in the project.

After reading Amy Wu and Nancy Lu’s blog posts on Abercrombie and Fitch’s CEO Mike Jefferies and the negative impact that he has had on the company, I began to think about how vital it is for a company to have the right CEO. I immediately thought back to when Amielle Lake, founder of Tagga, made us repeat that “our greed [should be] greater than our pride” and how she knew it would be best for the company to step down and let another CEO take over. The right CEO can make or break a company, and as we’ve been discussing in class a major part of a CEO’s job is to establish and define the company’s corporate culture.

I did more research on some of the world’s most successful CEO’s, and I found a blog post that mentioned Marissa Mayer and what she’s been doing for the past two years to try and redefine the Yahoo workforce, and there were many aspects that I thought were very intelligent. One point that I found particularly interesting was her stance on failure – because in most workplaces there is little to no room for failure, but it is often one of the only ways for a company to advance and grow. Mayer believes that  “It’s totally OK to fail. If what you’ve tried is working, throw more fuel on the fire. If not, pull back”. The corporate culture that Mayer is trying to establish at Yahoo is an environment where people are motivated to innovate and be actively engaged in the company, which I think will lead to great things for the company.

PS. On a side note, I think all first year students could learn something from Mayer’s views on failure.  We are all going through a period of massive change and we have had to adapt and reflect on what is and isn’t working. It is important that we remember that what matters most is we people react to failure and what we can learn from it.

In my classmate Nikki Non’s blog, she wrote about major companies investing their capital into smaller ventures, which got me thinking about my own personal risk tolerance and where I think it will take me in my career. Currently, I would consider myself to be a very risk averse person, but I am sure that as I become more educated, my views will change significantly. Unless I am very confident that I have done sufficient research and that my efforts will pay off, it is not likely that I would invest any time or money into a project.

My views are likely very similar to most large corporations. As Nikki mentioned, Intel did many calculations and assessments before deciding to invest in the new companies. As well, most entrepreneurs do extensive research before starting their companies, so I am glad that my personality is such that I do not like to blindly go into any project and I think it will help me in life.

I thoroughly enjoyed Lauren Smith‘s insight on Virgin’s approach to positioning and branding. I found it interesting that she noticed that Virgin does not seem to be following Ries and Trout’s advice in their book  ‘Positioning: The battle for your Mind’, which outlines many guidelines for companies seeking to diversify and understand how to design the most effective marketing strategy.

Lauren’s blog post made made me think about how there are many rules and instructions on how to be successful, but as demonstrated by Virgin and many other companies, it is obvious that it is not enough to blindly take other people’s advice. Each new company needs to take many different views and resources into consideration, and have the ability to pick and choose what information is applicable for their specific business and market. There is a wealth of advice and strategies available, and they are very useful as guidelines, but it is important that every entrepreneur be educated and able to think critically and derive information from the market and have an excellent understanding so you are not just blindly navigating the business world. That is why I am so motivated to learn as much as I can at Sauder, and be able to take everything that I will learn and apply it to whatever venture I choose to focus on.

I found Atsushi Yamamoto’s blog post on Coca-Cola’s reaction to Japan’s increased consumption tax very interesting, and it led me to wonder about their marketing strategy and how they became one of the largest companies in the world. I have always been fascinated by large corporations and what is so unique about them and how they came to stand out amongst all of their competitors. After conducting some research I found an article on entrepreneurship.com and it described the top ten ways to grow your business, and although the advice was very general, it gave me a better idea of how small companies can grow to be successful businesses. They suggested opening up another store, franchising, diversifying, and eventually expanding globally and electronically.

One thing that the article didn’t mention was strategic marketing and being adaptable to external changes and challenges. As Atsushi mentioned in his blog, this is what Coca-Cola has done best. When Japan increased their consumption tax by 3%, economists predicted that the tax would have a very negative effect on the market, but Coca-Cola successfully marketed the products that they knew would make the biggest impact, and were able to maintain many sales. So Coca-Cola’s reaction to what could have been a negative for their brand proved how strong of a company they are and that they’re here to stay.

I recently read an article published by the New York Times that really had a very strong impact on me. It told the story of  Justus Uwayesu, a young boy orphaned by the Rwandan genocide in 1994 who spent years living in a garbage dump and was recently admitted to Harvard University. His journey began back in 2001, when he was found by American charity worker, Clare Effiong. She was working for Ester’s Aid, and was on a mission to find impoverished children and eventually feed, educate, and train them. When she first got there, all of the other orphans scattered, but Uwayesu stayed, claiming that he “[wanted] to go to school.” His response made me realize how lucky I have been to have the opportunities to pursue my dreams and how so much of the world is denied the right to an education, among other things.

I believe that it is very important that we try and make a difference and start to brainstorm ideas about how to tackle some of the major issues going on today. I think that social entrepreneurship is an excellent way to start because the non-profit organizations are sometimes hard to sustain, so I strongly believe in businesses that focus not only on profit but also on finding innovative solutions to social problems that are prevalent today.

An example of a social enterprise is Kencada, a school in Mombasa, Kenya started by a group of North Vancouver residents who teamed up with a contact in Kenya, and I am a huge supporter of the project. It was just launched this past year and already is a success. I hope to eventually work for a social enterprise as I genuinely believe that the world needs to shift its focus from only profit to a combination of profit and whatever is in society’s best interest.

New York Times Article:

http://www.nytimes.com/2014/10/23/us/from-a-rwandan-dump-to-the-halls-of-harvard.html?_r=0

Kencada Academy:

http://www.kencadaacademy.com

Recently, BC Hydro has proposed the Site C Clean Energy Project, a dam and hydroelectric generating station which will be located on the Peace River in Northeastern BC. Unfortunately, like every new venture, there is a tradeoff. On one hand, Site C would provide enough clean “energy to power the equivalent of about 450,000 homes per year”, but on the other hand the dam would also flood 83 kilometers of farmland and wildlife habitat. In addition, the project would negatively affect the fishing opportunities and traditional practices of the Saulteau and Blueberry River First Nations. So the debate at hand is whether or not BC Hydro should go through with the Site C project or not.

The issue has been brought up to the the Federal Government and the verdict is scheduled to be released on October 22nd. The First Nations are very confident that the project will be shut down, but I think that both sides of the argument should take a step back and take a look at how their actions will be impacting the majority of the population in both the short and long term. I believe that the Aboriginals should not ignore the benefits that Site C would bring to the area, and also the job opportunities that would be created, but I also think that BC Hydro should respect the land of the First Nations. I don’t think that they will be able to come up with a solution quickly, as this is not the first time that this issue has been brought up. But I strongly believe that the two parties should try and work together to collectively do what is best for the Province in a respectful manner, and analyze the pros and cons of their decisions.

http://www.vancouversun.com/news/First+Nation+chiefs+stage+Site+showdown/10215965/story.html#ixzz3FUidJJRG

I recently read a very interesting article on the CNBC website that asked the question: what will happen to our digital assets when we die? In a time when more and more entertainment companies are moving towards an online streaming model, people don’t own a physical copy of a DVD or CD like they used to. In addition, with sites such as Netflix, people can choose to watch whichever movie they want without having to buy them, and the article was trying to understand what this will mean for consumers in the long run.

This article really made me think about intellectual property and how hard it is to regulate and measure. People spend a lot of money on digital content in a lifetime, and our digital libraries grow to be an impressive collection. Not that the monetary value of movies and ebooks would accumulate to a large portion of our total assets, but there would be no way of liquidating them if we ever choose to. The article suggested that consumers should have the right to resell digital content, but I’m not exactly sure how that would work. I don’t think that companies would approve of that idea.

So there are many questions being raised regarding the increase in technology, but it is very hard to predict what the implications of our actions will look like ten years down the road. I believe that it is very important to not move blindly and always be looking ahead. It doesn’t look like we will be switching back to hard copies of disks anytime soon, but it is important to think about what we are doing as we continue to move ahead with technology, just as it is with any venture.

http://www.cnbc.com/id/102032952

Well, it look like Apple has done it again.  On September 9, they announced the launch of Apple Pay, an online payment service that I predict will transform the way we make payment transactions. Apple Pay is an innovative tap-to-pay technology that allows iPhone 6 users to make  “ easy, secure and private” purchases at participating stores.

Apple pay poses a huge threat to other mobile payment companies, particularly PayPal (who is owned by Ebay), whose share price dropped approximately $3.50 since Apple’s new venture was leaked in August. In order to counter the threat that Apple Pay now poses to Ebay, Ebay has just announced that they will be spinning off PayPal,  a company that they bought just eight years earlier, sometime within the next year. I think that Ebay’s decision to differentiate themselves from Paypal is a very smart move. Now, the company Ebay is protected from the threat of Apple Pay, and if the share prices continue to drop and Apple Pay is successful then only PayPal will be affected. Shareholders have responded very well to this decision, which has resulted in Ebay’s share price shooting up 7.54% on Wednesday September 30th.

Ebay’s response to Apple Pay validates my belief that this is a perfect example of Apple doing what they do best. Apple is known for choosing a market, observing the competition, and coming out with a simplified, elegant product that disrupts the market. We have seen it with mobile phones, computers, music, and I believe that now we will see it with online payment market.

http://news.investors.com/093014-719610-googl-stake-in-ebay-is-unlikely.htm?ven=yahoocp&src=aurlled&ven=yahoo

https://www.apple.com/ca/pr/library/2014/09/09Apple-Announces-Apple-Pay.html

http://www.usatoday.com/story/tech/2014/09/30/ebay-paypal-split/16467739/

This past month, Alibaba, a Chinese e-commerce company, launched its initial public offering. This is very big news in the investment world, because at $25 billion, it was the largest in history. When trading ended on Sept. 19, the company was valued at $231 billion, and it generated enough buzz that Mohamed El-Erian, the chief economic adviser at Allianz mentioned that he believed that the sales could lead to a “broad market decline”, because most investors buying shares of Alibaba are most likely selling other stocks to buy Alibaba instead of using their own savings or borrowing money. Luckily, Alibaba alone should not be enough to “move the needle”, or at least not just yet.

Over the past fifteen years, Alibaba has become one of the largest e-commerce companies, and they are continuing to grow at a very fast pace. In my opinion a  large part of Alibaba’s success comes from the fact that they follow the long tail business model, term named by Chris Anderson in 2004. Essentially, the long tail model is based on the belief that the collective sales of low demand and custom products can equal or exceed the sales of only the most popular items, however this model only works when there are large enough distribution channels. Since Alibaba is an e-commerce business, they are able to reach a much broader range of customers. There are no inventory or store rental costs, which enables them to sell very broad and custom products internationally.

I predict that the world will be seeing a lot more companies following this business model as consumers are expecting very specific products and are no longer limited to the stores in their region.

http://en.wikipedia.org/wiki/Long_tail#Cultural_and_political_impact

http://www.businessweek.com/articles/2014-09-25/alibaba-ipo-pours-shares-into-shrinking-pool-of-stock

http://www.bloomberg.com/news/2014-09-25/alibaba-bears-emerge-to-short-8-9-million-shares.html

http://www.investopedia.com/terms/l/long-tail.asp