Social Networking Revenue?

While reading Connor Wilson’s on over optimistic CEO I began to think more and more about the entire social networking industry (if you can even call it that). As he mentioned in his post, snap chat- this massive social network, isn’t even profitable. I always wondered how these massive corporations like Facebook and Twitter are able to create revenue. I’ve heard it thousands of times “it’s from the adds” but this all seems very questionable to me. Perhaps I just simply don’t understand this marketing strategy, but I have never once paid attention to an add on the side of Facebook. Especially with the amount of spam that can be found on the internet today, I can’t see how an add on the side of a website can be effective. I feel like all these companies just saw the amount of people using these social networking sites and assumed that where there’s people, there’s money. Not necessarily realizing why people go to these sights in the first place- to interact.

 

Connor Wilsons Blog

West Jet International

In Maclean’s Business Blog I was informed on West Jet’s recent plan of offering international flights, mainly to Europe. They plan on “connecting Canadians to the world while bringing the world to Canada” allowing customers access to low cost flights to more than 100 cities in Europe. While it does seem almost necessary for an airline company to eventually fly internationally, I’m not sure if it’s such a good idea. First of all, the airline industry is a rare one in the sense that economically, it is extremely close to having perfect competition. This is a disadvantage because it is almost impossible for West Jet to create a substantial PoD- leaving it with huge amounts of competition in the international flight market. Second, is that West Jet is already known as an airline that provides customers with consistent low cost flights using Boeing 737 aircrafts. If West Jet wants to compete in this new market, it must first spend huge amounts of money on new aircrafts such as 767s and 787s as well as all the maintenance and luxuries that come with them. It is true that the actual airplanes themselves are fixed costs and would seem to be less significant in the long run, but are tons of variable costs that come with them such as fuel that will be extremely hard to pay off.

 

 

Business and Social Problems

The world today is full of social problems. From climate change, to deforestation, to hunger, to poverty ect. Many people look to big businesses and corporations to be key factors in creating these problems. One could argue both ways, but business definitely has a part to play in most major social issues. This has casted a shadow over the reputation business in general and has seemed to skew the population’s view of the matter. People today don’t trust business and it’s hard to blame them since business today is experiencing a low in terms of it’s reputation. But instead of looking at business in terms of the problem, one could also look at it in terms of the solution. Businesses such as not profit organizations are currently the best opportunity we have for solving these socials issues. Like we talked about in class, it is important for businesses to look at the shared value and the possibilities of being sustainable for the long run. In Michael Porters TED talk video he referrers to the positive side of capitalism as “meeting important need” which is exactly what business has the opportunity of doing.

 

 

 

Michael Porter TED talk

Response to Peter Chen

In response to Peter Chen’s post in relation to the Enbridge Pipeline, I have to say that I completely agree. In this day in age the world is literally addicted to oil. It seems as if we don’t even understand how many products, tool devices ect. use or require oil. It’s easy to just see people protest, not understand the benefits or necessities, and join in. Like Peter mentioned, when you don’t have a personal connection or understanding of the other side of the argument it seems obvious to oppose it. There are also no other alternatives. I doubt that all the people protesting are whiling to give up the use of oil in general- which is the only actual alternative to this environmental threat.

Peter’s Post

 

Globalization

I just recently finished a 2,000 word essay for my Political science class about globalization. I focused more on the economic side of it and carefully weighed the pros and cons. I’m not sure how familiar the people reading this post are with the idea of globalization, but I will assume they at least know what it is. While doing the research I began to look at everything through a capitalist point of view, thinking that since the overall standard of living and GDP are increasing then it is an overall positive to the economy. While this statement is technically true there are still plenty of people not benefiting from the international market and the divide between rich and poor is still getting bigger. This doesn’t mean that the poor are necessarily becoming poorer, but the rich are becoming richer at a faster rate. This is partly due to the lack of international business regulations, such as varying wage laws between nations (allowing certain businesses to outsource and exploit lower wage rates in other countries).  I came to the conclusion that globalization is overall good for the economy, but could benefit from an international organization that regulates trade.

Pro and Cons of Globalization

E-Cigarettes

One of the more memorable moments for me in Com 101 so far is when Scott asked the class “What do you want to be able to provide for other people?” Not what will be the smartest mathematical decision or necessarily the most profitable, but what will be the most helpful. The tobacco industry seems to be the extreme opposite of this idea. Taking advantage of human addictions and making a harmful profit out of it. The introduction of e-cigarettes is a fairly new product in the tobacco industry. Many large tobacco industries fear what they call a “Kodak Moment” where the digital side of the industry is soon to take over and that they will be too far behind to catch back up. E-cigarettes are not yet hugely popular in North America, but are growing rapidly in Europe. There have been many studies that have shown them to be substantially healthier than conventional cigarettes and even act as a better replacement than nicotine patches and gum. On the other hand, there is still controversy surrounding these substitutes. The fear is that they will encourage people who never smoked in the first place to take part in this trendy new activity.

A Kodak Moment

Breaking Bad

I am a huge fan of the recently finished television series Breaking Bad and I always found it hard to explain to others why I found it so interesting. After reading the article “The Breaking Bad School” I realized that maybe my subconscious self was intrigued by the way it related so closely to business in general. The more I begin to analyze the show, the more I feel able to relate it directly to our Com 101 class. I find myself breaking up Walter Whites business into a model canvas and studying the importance of ethics and reasons for his inevitable demise. He started with a strong ambition to create an extremely clear PoD and value proposition, as well as creating strong partner relationships with tight operations management. With his fresh perspective on the industry and intellectual capital, he was able to produce something that no one else could. Although, at the end of the day, one must consider how they are truly contributing to the world.  What seems to be a dominating theme in our classes as well as in the series was the idea of ethics. It’s easy to convince yourself that you’re doing something right when you’re accumulating huge profits. It’s much harder to tell yourself the truth when the alternative is so rewarding.

The “Breaking Bad” School

Pirate Joe’s

Just over one month ago, during frosh week, a man named Michael Hallatt was invited to speak in front of our faculty.  He filled us in on his unconventional business plan, which was quite simple: he would buy food from Trader Joe’s across the border and then sell it here in Canada for a slightly higher price.  This contraband idea landed Michael in a large lawsuit with this multi million-dollar corporation. I was happy to read yesterday that he actually survived this David and Goliath style lawsuit, but at the same time I am a more or less confused about the entire situation.  First of all, Michael’s business plan doesn’t seem to make sense. Instead of purchasing his products from a manufacturer at wholesale prices, he simply buys products for full price and then resells them for even more. My thought process goes like this: Michael knows that his target demographic consists mainly of people who are already familiar and fond of the brand Trader Joes. This means that a good portion of his costumers were once willing to drive themselves across the border in order to buy the same products for a cheaper price. I find it hard to believe that these people would consciously decide to pay a higher price for the same product when they were, at one point, contempt to buy it at a cheaper price before.  One could argue that his customers are paying that extra price to make up for the costs of driving across the border, but that just turns into variable costs that Michael has to subtract from his revenue. Therefore, his customers are merely paying him money to drive instead of them.

 

Pirate Joe’s Victorious

Who is Accountable for Business Ethics?

The more I begin to read about business ethics, the more it seems to become an essential factor of business strategy. That being said, the public and the government for that matter, do not seem to agree with this statement. In order to enforce ethics into the workplace, the government has created something called CSR (corporate social responsibility) to insure that corporations are meeting the right ethical standards. This would seem like a reasonable and perhaps necessary idea, but is the government truly accountable for these regulations? Many corporations already have various responsibilities which force them to make ethical decisions. According to Elanie Sternberg, there are two main things that insure ethics for business’s: ”ordinary decency and distributive justice”. For example, if you are a dishonest corporation, then you are lacking ’ordinary decency’ and are therefore unethical. A corporation with an unethical reputation will have a hard time ”borrowing, obtaining working capital, or forming relationships with customers”. There are already penalties that exist for unethical behaviour in the natural business world. Without ethics, a business cannot carry on. There is no need to hold government accountable for what should be a managerial responsibility to the owners.

 

 

Resources:

http://www.economist.com/node/3555286

http://www.economist.com/node/3577141