Month: October 2010

When I hear the word Rogers, I think of my cell phone. Rogers Communications is one of Canada’s biggest communications company. They specialize in the field of media and communications, providing services such as wireless communications and cable television. Rogers Communications Inc. is the big “umbrella” that the other branches of Rogers fall under? Under the big “umbrella”, there lies also Rogers Cable Inc., Rogers Telecom, Rogers Wireless, Rogers Media (which includes publishing and broadcasting), as well as sports. Yes, you read it. Sports.

When I think of Rogers, sports just doesn’t come to mind. On July 6th of 2010, Canucks Sports and Entertainment and Rogers Communications unveiled the newly renamed Rogers Arena, previously known as the GM Place. Rogers said, “we’ve got some exciting news to share with Vancouver sports and live entertainment fans. Effective today, the home of the Vancouver Canucks  will become known as Rogers Arena. This ten-year strategic alliance also makes Rogers the official telecommunications sponsor of the Canucks.”

So why did Rogers decide to expand its horizons this way?

1. This is the first time that Rogers has invested in a sports team of the West Coast. With British Columbia being one of the largest provinces, we are one of Roger’s most important markets. I think one of the reasons why Rogers made this investment is because Rogers sees the West Coast as a huge potential for growth.

2. Competition. No other communications or media company has yet invested in something like this in the West Coast. Rogers Communications is the first company to take such action. I think this was a brave move, but a good one, because Rogers definitely put themselves on top of the scale. From the marketing / positioning class we learnt that brand positioning is a manipulative, marketing tactic that tries to get products known by the market, or as Professor Paul Cubbon puts it, “brand positioning is the battle for the consumer’s mind.”

Most people use Rogers because of their phone selection and their network reliability. Now that Canucks and Rogers have a bigger and better affiliation with each other, more Canucks fans may turn to Rogers as being their cell phone or cable provider.

News of the week:
If you’re a Canucks fan AND a Rogers smartphone customer, you’ll be pleased to hear this: Rogers will be introducing a new application that allows users in BC / Yukon to watch Sportsnet games live on their smartphones for this season to celebrate the 40th anniversary of the Canucks and the 50th anniversary of Rogers Communications. This application will provide content from live press conferences, practices, and much more. The best thing about this application is that it’s free live streaming and no data usage charged, meaning you don’t have to use any of your limited data per month to stream this!

In class nine of our class, I learnt the differences between tactics and strategies. Tactics are short term, and they are made in order to address specific objectives. Strategies are long term, and affect a firm’s overall direction. Tactics are measured quite easily whereas strategies are harder to measure.

Recently, McDonald’s had an offer where if you bring in Monopoly® money into any Alberta or British Columbia location on October 6th and 7th, you would’ve been able to get an order of large fries for free. (Who doesn’t like freebies?!) People who may not think about a company’s tactics when seeing something like this, but after our last class about strategies and tactics, I was really confused about what McDonald’s tactics were for this particular promotion!

A friend suggested that maybe Monopoly® wants to reuse and recycle their paper money and therefore collaborated with McDonald’s (along with their yearly promotion of the Monopoly® game that you can play when you purchase particular items). At first thought, it sort of made sense. Maybe Monopoly® is trying to raise awareness that they’re environmentally friendly too? After giving it some more thought, no, it doesn’t make sense for Monopoly® to do this because the paper money being brought in may be recyclable, but what’s in it for McDonald’s? They probably make more profit from just selling the fries itself than to take the Monopoly® paper money from consumers…

After much consideration, having people come in to stores being able to get free fries also meant that they would order other things along with fries. Most people don’t just eat fries by itself when they walk into McDonald’s, especially if customers bring their children in with them. With the purchase of some products, they are able to add to their collection of the Monopoly® stamps. This was McDonald’s strategy! Most people would go on thinking “yay freebies!”, but with a business mindset, I think this was a brilliant tactic!

Two classes ago, we had the chance to preview what finance is and may be like in class. I learnt that finance is about “allocating resources more efficiently in the economy” and is a “subfield of economy, applying basic economic principles to study the supply and demand of the capital”.

A couple ideas that came to mind about finance within our class was stocks, investment, big salary, and also currency, just to name a few. Our guest lecturer, Professor Murray Carlson had said that other aspects of finance also includes portfolio management, investment banking, and also security fraud. Prior to this class, personally, when I think of finance, I think of the New York Stock Exchange and the Toronto Stock Exchange. After this class, I had the chance to learn about other aspects of finance, and that it wasn’t just all about stocks.

Food for thought: http://www.theglobeandmail.com/globe-investor/investor-education/investor-clinic/clinic-video/fries-with-that-dividend-increase/article1745934/
I think McDonald’s has experienced increased dividends because of the potential that investors see in McDonald’s, as well as the amount of money people are still willing to spend on McDonald’s foods. Even though the awareness of being healthy is being raised across North America, fast food restaurants like McDonald’s is still popular among food choices. It’s no wonder the dividends for McDonald’s has increased over tenfolds in the last the years!

A few keypoints I learned from the class was:
– When stock prices are underpriced, it may mean that the company is not doing very well and therefore the stock prices have dropped. Financial analysts will then tell the public to buy the stock so that the price will eventually increase again. Or it may be that the company isn’t well know and financial analysts see potential growth in the company.
– You cannot do finance without the reported numbers from accounting. Accounting is the language of business, and tells you the financial state of the firm. Finance includes both qualitative and quantitative information, usually provided to outsiders and investors to attract them to invest in or to buy the stocks of the firm. (Recall from our first class how we learned that marketing, accounting, and finance all have something to do with each other. In this case, you can’t do finance without the reported numbers from accounting.)
– Fundamentally, as an investor, you are giving up money today so that you can earn money for the future. The most important characteristic of an investment as an investor, is to understand its dividends.

I hope you guys enjoyed the Finance class as much as I did!