The Blog post offers an interesting look at the definition of risk management in business and clears some misconceptions on the definition. MacDonald, the blogger, refers to Professor John Boatright who states that instead of “reducing risks” in risk management, the concept of risk management is finding the right combination and degree of risks. Professor Boatright also states that the public needs to be aware of how corporations are looking at risk management and their perception of risks.

In my opinion, Boatright brings up a good point in that one needs to understand that in the business world, corporations, entrepreneurs, employees etc. all take risks and to succeed, will be required to take risks regardless of whether they want to or not. It is simply the nature of business. However, individuals in the business field can carefully plan out what risks they are willing to take, and which risks are worth taking and would achieve greater results compared to other risks.

http://www.canadianbusiness.com/blog/business_ethics/106699–the-need-to-manage-risk-management

(AP / Virginia Mayo)

Europe today is still facing an economic crisis. Specifically Germany, despite finally getting out of its financial debt, still has a problem, starting up the economy again. There are a number of reasons concerning the reason why the economy in Europe is being held back. The article states a variety of factors ranging from government policy to the refusal of consumers to spend more money to subsequently help start back up the economy.

With this jumble of concerns and issues circulating around Europe’s failure to quickly recover from their financial debt and resolve their poor economy, it’s extremely difficult for European governments to effectively set up a strategy in order to efficiently resolve their debts. Furthermore, as Europe as a whole is facing this problem, governments need to cooperate and effectively coordinate a strategy in order for all parties to reach the same goal of financial recovery. However, this will require strong coordination between governments, strong communication, and regardless of the strategy that the governments decide to implement, either consumers, banks or government policy or perhaps all parties will have to compromise in order for the economy to start back up again.

http://www.ctvnews.ca/world/as-eurozone-economy-shrinks-gov-t-debt-loads-grow-1.1042272

As a parallel to the bankruptcy of Hostess, Dell and HP, two strong PC brands, are facing a consistent fall in their stocks with Dell falling 34.7% from the start of the fiscal year and a 49.2% decrease in stocks compared to the start of the year. However, Apple’s current situation, despite a loss in stocks, currently have a 29.8% increase in stocks compared to the start of the year. These statistics highlights both the ability and inability to adapt to the changes of the world, the movement from the PC to the mobile internet.

This report ties with not only the fallout of Hostess, but also the establishment of a new retail store in Toronto by Microsoft. The major PC brands are attempting to mimic the strategies of successful competitors such as Apple in order to adapt to the changes in the market. However, can Dell and HP be able to successfully push past this slump? It will all depend on how Dell and HP will be able to differentiate themselves in comparison to their competitors with the experience that they can offer to customers.

http://money.cnn.com/video/investing/2012/11/16/investing-hp-dell.cnnmoney/index.html?iid=SF_BN_River

(JASON LEE /REUTERS)

11 Furniture, a knock-off Ikea store located in southwest China, has come to the attention of Ikea. 11 Furniture, like other “knock-off” companies, is just one of the examples of the type of stores that are emerging throughout China. Stores across China have emerged that mimic products/storefronts of brand named businesses such as Apple. However, the potential for these stores to damage the reputation of the brands if consumers believe that the stores are indeed affiliated with their corresponding brands may prove to be lethal to these businesses.

This emergence of these types of stores has been in response to the developing economy of developing countries like China. If you think about any other country that was at one point, experiencing a developing economy, you will notice that there have been the same types of stores appearing in those countries during that time. Why does this occur? In a madly developing “third world” country where everyone is trying to emerge from poverty and get rich, intellectual property and patents are foreign concepts that are luxuries of developed Western countries. Combine this attitude with a legal system that have a poor ability to enforce IP laws in not only the major cities in China, let alone the second tier and third tier cities away from the coast.

The pattern of copying successful business models and products from the West has been used by most of the successful Asian economies (Japan, Korea, Hong Kong, Taiwan, etc). That is the fastest way to learn from scratch and get to a level of capability that enables them to compete. Once they hit a level of economic maturity and these countries develop their own intellectual property, attitudes, laws, and enforcement will reach Western norms. This breach of intellectual property rights is unacceptable, but “understandable” given the current conditions of the Chinese economy and society. However, letting this piracy continue will seriously damage China’s international reputation and the “China brand”. Therefore, this will also be unacceptable for the new Chinese leaders who recently took office and I would expect that concrete measures will be taken … but due to the scale of the problem, it will not be a quick fix.

http://www.theglobeandmail.com/report-on-business/international-business/chinese-retailers-hijack-the-ikea-experience/article590004/

Hostess, the maker of the Twinkie and Wonder Bread, has gone out of business after a nationwide strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. With its 18,500 workforce no longer in employment, Hostess has stated that it will be focussing on selling out their assets to the highest bidder.

The strike was the straw that broke the camel’s back and ended all chances for Hostess to survive. Although Hostess management seem to indicate that the company could have been saved if all workers returned to work by Thursday, I highly doubt that Hostess would be able to survive.

The fact that the business was retailing products in a narrowing market of people willing to buy unhealthy treats and losing sales while maintaining a very poor relationship with employees resulted in the loss of the business and loss of work for the employees of Hostess.

If there was a stronger relationship between workers and managers, could the downfall of the company been prevented? If the union was more flexible and accepted more company conditions would the company have survived? The opportunity to turn the company around was long past. I think that despite the annual sales of $2 billion dollars, the shrinking market for unhealthy snacks, the unhealthy relationship with its workforce would make it nearly impossible to save the company. How could management not see the potential for bankruptcy to do something about it earlier and equally puzzling, how could the union and workers continue to “play chicken” and risk causing the company to go bankrupt and ultimately losing all their jobs.

http://www.bbc.co.uk/news/business-20364595

(Peter Power /The Globe and Mail)

Microsoft Corp has recently opened a new retail store in Toronto. To differentiate their experience to the customers they have decided to make their entire store touch- sensitive, placing massive touch screens along the walls of the store. This is, as the article states, the strategy that many companies have also done such as Samsung and Apple.

Microsoft is merely trying to emulate the success Apple has had with their physical stores. If they want to take a bite out of Apple’s market share, then they will need to do something different. The store designs seem to copy Apple’s and adding big comfy chairs is not the differentiator that will enable Microsoft to beat Apple. Although Microsoft does not yet have the full line of sexy products that Apple have (iPhone, iPad, iPod, Macs, etc), Microsoft is now waking up to the opportunity presented by mobile devices (tablets, phones, etc) and the cloud. Windows 8, their new operating system is all about mobile devices and cloud computing. They are finally starting to develop products (Surface, Kinect, etc) that may begin to compete with Apple, but the question now is it too late to catch up with Apple? The other differentiator is that the Microsoft will partner with other vendors and carry products from Lenovo, Acer, HP, Dell, etc

http://www.theglobeandmail.com/globe-investor/new-microsoft-retail-store-aims-to-establish-cool-stuff-factor/article5353443/