China’s Thirst for French Champagne

Browsing through Bloomberg’s professional blogs, a post titled “Rothschilds tap Chinese thirst with first vintage champagne” caught my eye. As I have worked in the wine industry, I am well aware of the huge demand for Bordeaux red wine and champagne in China and Hong Kong over the past few years due to the increasing size of their middle class. Whilst growth in China has slowed, Rothschild is convinced that it won’t affect the sale of 2006 vintage, its first single-year vintage. Although quoted in the blog were the statistics that “exports of champagne to China fell 0.6 percent in 2014 to 1.62 million bottles” but that “shipments to Hong Kong increased 0.4 percent to 1.66 million bottles” (statistics from Comite Interprofessionnel du Vin de Champagne website).

 

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Photo Source: http://www.thefrenchcellar.sg/wp-content/uploads/2015/10/mouton1.jpg

 

The Chinese middle class, who were once considered nouveaux riche, are now experienced and knowledgeable wine lovers according to the chairman of Champagne Barons de Rothschild, Philippe Sereys de Rothschild. However, I’m not so sure I would agree. Champagne Barons de Rothschild has allocated just fewer than 10 percent of its 2006 vintage champagne to Mainland China and Hong Kong, but with the decline in growth in China, it shall be interesting to see whether the chairman’s sales statement will hold true.

 

Sources:

http://www.bloomberg.com/professional/blog/rothschilds-tap-chinese-thirst-with-first-vintage-champagne/

 

Solar Panels: A Brighter Future

Lewis Dillman wrote an article on how the solutions to decarbonisation, mainly focusing on wind power, which made me consider how effective solar power is. Both these ideas need to be developed more and be more efficient before being implemented. However the problem from the social perspective is that these innovations need to be implemented as soon as possible, resulting in situation like Germany where wind turbines are placed with large subsidies that have very little output. Alternatively from the purely economic perspective, such incredibly large subsidies were doomed to fail considering the severe price difference between wind/solar power and energy from coal. The German Minister of Economics even calling the wind turbine subsidies a “threat to the economy”.

 

Lewis mainly refers to wind power as being an inefficient source of alternative energy. Solar power is generally deemed to be more effective but at the current standard is isn’t.

 

solar-farm-panels-sarahjpg-data

Photo Source: http://www.abc.net.au/environment/articles/2012/10/26/3618724.htm

 

How well solar power works is largely dependent on how where they are located. I lived in Australia, where solar panels are pushed by the government to be installed with heavily subsided prices and constant television advertisements. They do function well there; especially on large solar farms (pictured above) but aren’t practical in Canada, especially in constantly overcast cities such as Vancouver.

 

The issues with associated with solar panels:

  • Efficiency is only 22%
  • Uses extremely expensive semiconductor
  • Expensive installation and maintenance costs
  • Lasts 25 years but batteries have to be replaced every 5-10 years

 

It seems that if the efficiency were to increase, most of the other problems would become less significant. However, until then perhaps solar panels aren’t the route to take in Canada.

 

Sources:

https://blogs.ubc.ca/lewisdillman/2015/10/04/a-more-natural-solution-to-decarbonization/

http://www.theglobeandmail.com/report-on-business/rob-commentary/natural-gas-not-decarbonization-is-the-ticket-to-reducing-emissions/article26645293/

http://www.solarpoweristhefuture.com/problems-with-solar-energy.shtml

Volkswagen: Corporate Corruption

 

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Photo Source: http://www.gocomics.com/jeffstahler/2015/09/23

 

Nearly two months after news broke about the Volkswagen emissions scandal which has now been dubbed the “diesel dupe” we are still hearing about the company was found to be altering their emission output when tested, making the car seem more eco-friendly in the results. This has clearly had a detrimental effect on Volkswagen, who’s stock fell by 20% on the first business day after they admitted to cheating on emissions tests. Furthermore, other brands under the Volkswagen group such as Audi, Porsche and Skoda have been involved the scandal, resulting in even more recalls.

 

Screen Shot 2015-11-17 at 7.29.31 pm

Graph Source: https://ca.finance.yahoo.com/echarts?s=VOW.DE#symbol=VOW.DE;range=1m

 

Using the tools discussed in Comm 101,  the Urgency-Importance matrix proved to be beneficial when discussing an event such as the Volkswagen Scandal.

Screen Shot 2015-11-17 at 8.25.10 pm

Table Source: Catherine Hackwell using Microsoft Word

 

As can be seen, the diagram is heavily weighted towards the high urgency and high importance region of the table, showing how significant the scandal is.

 

Martin Winterkorn stated to CBC “I personally am deeply sorry that we have broken the trust of our customers and the public.” However, it must be hard for consumer to trust this statement, as Volkswagen was very comfortable lying about emissions until the truth came to the surface.

 

Sources:

http://www.bbc.com/news/business-34324772

http://www.cbc.ca/news/business/volkswagen-emissions-rigging-1.3236548

Steve Jobs’ Management Style – Does bad management work?

Human resources are a vital part of any business and it is widely considered that treating your workers with respect and dignity goes hand in hand. Bad management can severely affect employees, resulting in high turnover ratios, stress and inefficiency. One article explicitly stated that behaviour such as “mocking someone’s performance in front of others, shouting and swearing, taking credit for the work of others and walking away mid-conversation” should seriously be avoided in the workplace. However, some say that aspects of bad management can be effective in motivating employees to work harder. Steve Jobs was the poster boy for this kind of management style.

SteveJobsBook

Photo Source: http://thefilmstage.com/news/sony-developing-steve-jobs-biopic-based-on-forthcoming-book/

 

One article titled “Be a Jerk: The Worst Lesson from the Steve Jobs Biography”, stated how he was a “visionary… genius… and brilliant innovator” but also a “world-class asshole”. He was known for publicly humiliating employees and monopolizing the credit for work he hadn’t done – two characteristics that have been previously stated in this blog which are the recipe for disaster in terms of management. He also succeeded in cultivating one of the most successful technology companies in the world. It could be said that this was mostly due to his innovation and less to do with his management techniques, neither can be definitively stated. Personally, I believe that being civilized with ones employees in an engaging way would have better results that the risky actions demonstrated by Steve Jobs.

 

Sources:

http://www.bbc.com/news/business-34604387

http://www.theatlantic.com/business/archive/2011/11/be-a-jerk-the-worst-business-lesson-from-the-steve-jobs-biography/249136/

http://smallbusiness.chron.com/effects-bad-management-employees-13378.html

“One for one” is not the answer

I am opposed to the “one for one” business model because…

In terms of Toms vs. soleRebels, no one would buy shoes if Toms will distribute it for free. Also, the “one for one” business model of Toms ruins the industry for local businesses/cobblers. Toms cannot accurately produce the correct number of shoes in the correct sizes, thus resulting in surpluses and shortages. Furthermore, it can be said that Toms may distribute shoes to places that are in need other things that are more vital. The “one for one” business model” is not a sustainable idea because once Toms stops distributing the shoes, the supply stops instantly, with a lack of local businesses to fill in the market gap. One of the biggest problems with Toms’ “one for one” business model is that Toms do not employ natives within the country that they hand out free shoes and do not actually add to the local economy. Toms means well and is good in theory but in practice the outcomes are not that favourable.

 
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The SoleRebels Weaving Team – photo sources: http://www.solerebels.com/pages/our-team

 

The positives of soleRebels provides jobs, training and medical cover for locals. They also provide transport for locals which means that people are not made worse off just because they cannot get to work. SoleRebels pay three to four times the minimum wage, allowing more people to be supported by the one salary. Due to the fact that they operate within Ethiopia, they put more back into the Ethiopian economy.

 

Sources:

http://knowledge.wharton.upenn.edu/article/one-one-business-model-social-impact-avoiding-unintended-consequences/

http://www.fastcoexist.com/1679628/the-broken-buy-one-give-one-model-three-ways-to-save-toms-shoes

http://www.solerebels.com/pages/our-ethos

Great Results for Innovative Workspaces and Management

The topic of Class 19 was ‘People, Culture and Teams’, focusing on the innovative business structure and human resources management techniques. The shoe company Zappo concentrates a lot on customer service and job satisfaction. In fact, the company invests a lot into making sure they hire the right type of person to fit in with their organizational culture, even offering people money to quit during the hiring process.

Whilst Zappo creates a family like atmosphere to encourage the best possible customer service, Google builds a fun environment to inspire their employees’ creativity. They have Google Cafés designed to encourage interaction between departments, which lets employees connect both on a work and personal level. The note-taking app start-up “Evernote” offers employees professional house cleaning twice a month and doesn’t even monitor how much time off they take. The culture of tech companies such as Google and Tesla acknowledge that creativity cannot be nurtured in a concrete box.

Blog 9 Pic

Google’s Meeting Eggs in Zurich, Switzerland – https://www.google.com/about/company/facts/culture/

However, the successes of innovative and alternative human resources managements are dependent on the industry and the country where it is taking place. For example, a Forbes article on the topic of countries with the highest working hours per week stated that 29% of Mexican workers will work over 50 hours per week and that “the average Mexican will work up to 450 hours more than an American every year, earning less than a fifth of the pay.” However companies like Google and Tesla realise that as long as their workers are efficient, they don’t necessarily have to be in a typical work place setting, with Google even letting their workers bring their pets to work.

Whilst technological industries and customer relationship focused companies excel when using innovative human resources managements, they may not work for all areas of business (e.g. banks or hospitals).

 

Sources:

https://www.google.com/about/company/facts/culture/

http://www.google.com/about/careers/lifeatgoogle/

http://www.forbes.com/sites/laurahe/2013/03/29/googles-secrets-of-innovation-empowering-its-employees/

http://www.fastcodesign.com/3026220/tap-into-the-7-secrets-of-silicon-valleys-innovation-culture

http://www.forbes.com/sites/niallmccarthy/2015/04/21/these-countries-have-the-most-annual-working-hours-infographic-3/

The War on Uber

People around the world love Uber and it’s plain to see with the company working in 60 countries around the world. However, some countries don’t like Uber quite as much, as it is banned in several countries, including the Netherlands, Spain, Thailand and Taiwan, and the list is growing. A majority of the protest comes from taxi drivers, with London’s Black Cab drivers filing a lawsuit this week against Uber. Their main arguments are that Uber’s insurance is not up to scratch, the company doesn’t pay tax like it should, its practices are unsupervised and unsafe and that driver and passenger data isn’t safe.

 

Uber London

Image One: Taxi drivers demonstrate against Transport for London (TFL) outside the organisation’s offices in London, Britain May 26, 2015

 

Safety is a common argument brought up in the fight against Uber around the globe but it is as valid as it seems? It’s very hard to tell as there are many statistics and the media has potentially skewed the view. As Uber uses its app and no cash is actually transferred, it is not possible to have illegal Uber cabs. Furthermore there is little to suggest that there are any more assaults from Uber drivers than there are from regular drivers.

 

As previously mentioned, a main problem for Uber is insurance as many of it’s driver’s are signing up believing that they have the right type of insurance when they don’t, resulting in multiple lawsuits, with more coming Uber’s way.

 

Canada’s stance is mixed, with cities like Toronto embracing Uber, who has 500,000 customers per month, whereas Vancouver is on its way to banning the company from operating there. The outcome of this battle is yet to be seen.

 

Sources

http://www.businessinsider.com/heres-everywhere-uber-is-banned-around-the-world-2015-4

http://uk.businessinsider.com/ubers-enemies-have-clifford-chance-fighting-to-ban-it-here-are-the-5-big-arguments-2015-10

http://uk.businessinsider.com/despite-its-problems-uber-is-still-the-safest-way-to-order-a-taxi-2014-12

Image One: http://uk.businessinsider.com/ubers-enemies-have-clifford-chance-fighting-to-ban-it-here-are-the-5-big-arguments-2015-10

Sustainable consumption and Business

Some people assume that a company’s main goal to just to achieve the highest profit, often regardless of cost to other areas. It’s hard for sustainable consumption to be a goal for a firm, as they would want to sell as much of their good as possible. But could this change?

 

My inspiration to write a blog on overconsumption was sparked when I was sitting on a bus and a group of girls came in with multiple large bags of shopping each. This group struggled to find space on the cramped bus, as there was already another group of people with all their shopping too. I couldn’t help but wonder whether they actually needed it or how often they would actually use any of it. A large part of the overconsumption is that consumers are simply buying far too much than they need which occurs in all aspects of consumption. According to a report by Consulting firm Value Chain Management International, food waste costs Canada approximately $31 billion every year, which is a 15% increase from the estimated $27 billion four years ago. If society changed its view on consumption and tried to reduce its waste, perhaps these statistics would be lower, or at least decreasing instead of increasing. What’s more concerning is that we are running out of these resources but consumption and waste continues to increase.

 

Truck moving trash in a landfill

Image One

 

However, it appears that as consumers become more aware of how much they are wasting and make better choices about the products they buy; the producers react and adjust to the demand. Like the trend increased demand for Fairtrade products is growing as people are becoming more aware of the production of the goods they purchase, hopefully the idea of decreasing will become increasing popular too. The change needed seems to be in the control of the consumer and therefore the responsibility of consumers.

 

Sources:

http://www.cbc.ca/news/business/food-waste-costs-canada-31b-a-year-report-says-1.2869708

http://www.theguardian.com/sustainable-business/sustainable-consumption-production-social-responsibility

http://www.reuters.com/article/2015/04/14/us-global-food-water-idUSKBN0N522Y20150414 

Image One: http://www.mavericksynfuels.com/feedstock/solid-waste/

Women in the Workplace

Jordan Gaudet, a fellow Commerce 101 student, recently published a blog article titled “Why Are Companies Not On Board With Women Being On Boards?” which stated that a majority of women were not being given the same opportunities or credit as most men. As a fellow female, I feel conflicted about this topic, as much has changed in the world of female employment over the past few decades but I do agree that the level of equality still has a long way to go.

Women in the workplace

Image One

 

Whilst Jordan’s point is completely valid, I believe that there are other factors that could cause these statistics. For example, some women choose to take time off to start a family, often taking more time away from employment than just maternity leave. Alex Johnston (Executive Director of Catalyst Canada) said, “For one thing, the myth that there are not enough qualified women – because CEO posts are still dominated by men – needs to be debunked.” Overall, the sheer lack of motivation to put women in executive positions is saddening and a lot more change needs to occur in the setting of goals within companies. Luckily, more companies appear to be making more of an effort to change these statistics as the percentage of women on boards have increased steadily over the last decade. CIBC’s President and CEO announced this week “Our goal is to continue to move that upwards because we think it’s good for the company, it’s good for our culture, it’s good for business.” Hopefully more companies will follow suit in the future.

 

Sources:

Jordan Gaudet’s Blog: https://blogs.ubc.ca/jordangaudet/2015/09/29/why-are-companies-not-on-board-with-women-being-on-boards/

Image One: http://www.catalyst.org/knowledge/statistical-overview-women-workplace

Quotes: http://www.coastreporter.net/cibc-to-set-target-numbers-for-women-on-board-in-senior-executive-roles-ceo-1.2071712

Starbucks and Business Ethics

Business ethics, like ethics in all areas, can be quite controversial. Many corporations may take shortcuts to decrease their costs, but at what expense do they come? Lately there has been an increase in demand for Fairtrade and organic products, further slamming unethical practices1.

 

Screen Shot 2015-09-29 at 11.00.41 pm

Image One 2

 

In a relatively recent article, the Guardian revealed that Starbucks was amongst some of the most unethical coffee shops in the UK. This was calculated using a combination of factors consisting of unethical financial activities, treatment of workers, product sources and more. Starbucks in particular was condemned for cutting employee lunch breaks, trade union violations and tax avoidance. These actions may have resulted in cutting their costs but have ultimately come back to bite them, particularly when Starbuck’s tax evasion was brought to light. The large multinational corporation admitted to paying only “£8.6 million in tax since 1998”3 which resulted in a fall in sales across the UK. Other companies also slammed for their unethical practices include Café Nero, Pret a manger and Harris & Hoole.

However, Starbucks do go some way to achieving a level of ethical standing by using 99% Fairtrade coffee in its stores, although many consumers have decided to change to independent coffee shops.

                                   

Sources:

  1. http://www.entrepreneur.com/article/235435
  2. http://static.guim.co.uk/ni/1427908531586/ethical_coffee_ranking.svg
  3. http://www.theguardian.com/sustainable-business/2015/apr/21/starbucks-caffe-nero-costa-tesco-ethical-coffee-rankings (whole article)