In Jim Edwards’ blog “How Candy Crush Convinced This 22-Year-Old Startup CEO That Games Are NOT The Future Of Mobile Advertising”, he introduced the 22-year-old Sauder grad, Brian Wong, who obtained his undergraduate degree at the age of 18, and is the founder and CEO of Kiip, a mobile ad company.

Kiip’s original focus was to offer gifts from major brands to people who have reached certain milestone playing games on their smartphones. This new method of advertising eliminates the interruptive nature of in-game advertising, and also acts as an incentive  as the players are unaware of when the reward would pop up.

Wong’s recent decision, which was validated by King.com’s decision of eliminating all ad in Candy Crush Sage, includes shifting Kiip’s focus away from mobile games, as addicts of popular games are likely to pay for the removal of inter-level ads.

Since January of 2013, Kiip has been expanding its customer base by pushing heavily on non-game apps. Such action is driven by Wong’s belief that users of certain mobile apps, such as apps that keeps track of a healthy living style, should be rewarded for reason of simply using the apps. Kiip runs on a business model that’s  revolutionary and distinct from its predecessors. It is likely to change the perspective and focus of future entrepreneurs.

Link:

http://www.businessinsider.com/kiip-ceo-brian-wong-changes-mobile-game-ad-strategy-2013-7

The last hurdle of the merger of American Airlines and US Airways has being removed as the U.S. Justice Department gave its approval that led to the creation of the largest airline in the world.

The merger is a strategy that provides the combined airline a sustainable advantage over its competitors, such as the linked carriers of United and Continental. Synergy can be created through higher productivity, which would be achieved by the combination of increased efficiency, and the advantage of little overlap in the routes of the two airline.

According to the news the “airline sector has been known for financial woes despite ample demand for air travel”. This merger will not likely lead to decrease in price for ticket, rather, the price is expected to continue up a steady incline as the combined firm is one step closer to obtaining monopoly power.

The combined airline is also intensely focused on a new customer target of business professionals, who have the need to fly to places around the globe with few connections.

Link:

http://www.cbc.ca/news/business/american-airlines-us-airways-get-final-merger-ok-1.2424053

In his effort to support public interest, EBay founder Pierre Omidyar declared to embark on the creation of a mass media organization. Omidyar wrote in a post that he considered buying the Washington Post, which was ultimately sold to Jeff Bezos, founder of Amazon.com. Omidyar’s change of mind is likely due to his desire of “position[ing] the company any way he wishes[, and] not have the lingering past perception from the Washington Post to be in his way”, as mentioned by Krista in her blog.

This is a smart move from an organizational behaviour perspective. The already established corporate culture of Washington Post can become a liability if the new shareholders’ value goes against the environment of the company. If Omidyar had purchased Washington Post, he would eventually have to develop strategies, such as assimilation, in an effort to create a effective, functioning, new culture.

In my opinion, Omidyar’s new venture might encounter a lot of difficulties, such as intensive government regulations. Nevertheless, the innovative mind that founded the world’s leading e-commerce website might just prove the views of his opponents wrong in his genius way.

Krista’s blog and link:

Becoming Number One Again.

http://www.nbcnews.com/business/ebay-founder-plans-independent-news-venture-wants-engaged-citizens-8C11406533

On November 5, I attended a Sauder event that involved Justin Bosa from Canaccord Genuity talking about real estate investment banking. Justin Bosa, a Sauder Grad of 1997, is currently the managing director of the real estate division at Canaccord Genuity, a global scale investment bank.

Mr. Bosa talked about the future of Canada’s real estate capital market, as well as the present prospering US market. One reason for the tremendous growth in the US market is due to the economy recovering from the economic recession. Similar rationale applies to the Australian market, which is the second fastest growing market.

The Canadian real estate market , on the other hand, has came to a stall as fears of rising interest rate has facilitated extensive sell-off of Canadian (and US) REITS. This led to Canaccord Genuity’s cut back on the target price of Canadian real estate investment trusts by as much as 5%.

REITS are securities that are traded in the stock market. They allow both big and small investors to own properties while enjoying high levels of liquidity in the investment.

In the same report, Canaccord Genuity has also predicted two likely scenarios while referring to the negative relationship between long-term bond yields and REITS valuation.

Link:

http://www.bnn.ca/News/2013/6/12/Canaccord-Genuity-cuts-REIT-target-prices.aspx

In September, Apple launched a new line of cheaper-priced iphone product-the iphone 5C. The release was a success and Apple recently reported an increase of 4% in its quarterly revenue. However, the drop in price also led to a 8.5% drops in earning in the fourth quarter to 7.5B USD over 8.2B a year ago.

The demand for iphone 5C is elastic and a drop in price drove up sales and revenue. I think the drop in price can be perceived as a strategy Apple developed to combat its close competitors, such as Samsung. In the concept of creating shared value, Apple reconceived product and market by focusing this new line on the less wealthy customers. This way, Apple widened its customer segments by enabling a larger portion of the global population to use its product, which was not originally affordable by  many potential customers who were interested in it.

Apple expected revenue to reach between $55B to $58B in the first quarter of 2014. My opinion is that Apple should aim at ceasing its reduction in quarterly profit to maintain its stock price.

http://www.cbc.ca/news/business/apple-s-4th-quarter-profit-down-9-on-cheaper-iphone-models-1.2254969

It was an honour to have Nolan Watson, president, CEO, and chairman of Sandstorm, talking to us in class via Skype. Through a combination of his short introduction of Sandstorm in class, and a formal interview Mr. Watson conducted with The Street, I have noticed a few points of parallel between the various business concepts we discussed in class, and Sandstorm’s operating principles.

In an effort to explain the advantage of investing in gold streaming over an exchange-traded fund (ETF), which essentially describes a tradable security that tracks numerous assets, Mr. Watson mentioned that the money value of an ETF shrinks overtime. This is possibly due to management costs and inflation. On the other hand, the stock price of Sandstorm fluctuates along the price of gold, this minimizes the effect of inflation and have proved to be a more sustainable investment for investor.

As far as the industry goes, gold streaming has little risks, as Sandstorm is not exposed to the actual operational cost associated with exploiting the mine. Mr. Watson also explains that instead of viewing the investment of private equities (PE) as direct competitor, he rather partners with them to co-finance great projects.

http://www.sandstormgold.com/media/

The Canadian federal government has switched the production of medical marijuana from a monopoly to a relatively free market as it opens up a new commercial industry for entrepreneurs. This is a precious opportunity for new entrants, as it is rare to have a brand new market.

Just like what Ries and Trout stated, being the first in an industry is the easiest way to make the customers remember you. Since June, 171 parties have applied for a licence, which opens the door to the industry that is expected to worth $1.3 billion by 2024. Other than being the first, the producers are also establishing the point of difference by personalizing the cannabis’ contents through different tetrahydrocannabinol (THC) concentration for different customers.

Economically speaking, surplus will be maximized with the combined effect of a free market and economies of scale. However, the estimated high price of $7.60/gram might become a burden on the users in the short run, and ultimately lead to  black market behaviours or the illegal action of home growers.

Source:

http://www.cbc.ca/news/canada/canadian-pot-growers-eyeing-medical-marijuana-free-market-1.1894621

One of my fellow classmates, Zilue, has posted a blog regarding a popular business ethic problem–are CEOs paid too much? Recently this debate was also brought up in my Comm 292 course as we studied the chapter on motivation among organizational behaviors.

Zilue argues that excessive executive compensation causes “harm to the corporation in the long run by cultivating a culture that is driven solely by numbers.” Some of his arguments include the questionable performance of the CEO, the arousal of dissatisfaction among employees and the shareholders.

I would take a different side from Zilue. During an interview, Pfzer’s Hank McKinnell admits that the CEOs are being paid very well, but since “nobody has any idea what the right level should be,” such debates should be minimized to prevent any government intervention in the market. A CEO is responsible for setting direction of operation for the corporation.  Theoretically, as a result, money acts as an extrinsic value to retain the CEOs’ high level of loyalty and motivation. Just like the saying “all that glitters is not gold, but gold will glitter forever,”  it is not difficult for a CEO with high level of self-efficacy to play job-hopping and serve for another more competitive company. Rather than discouraging the employees with the income gap, CEOs compensation should act as an incentive for the employees to strive better. Last but not least, what would the shareholders of a corporation think if the CEO’s compensation is suddenly halved? They are likely to loose confident in that company and ultimately result in a devastating fall in stock price.

Links from Zilue’s blog:

Do CEOs Get Paid Too Much?

http://money.cnn.com/magazines/fortune/fortune_archive/2006/07/10/8380799/

CEO Pay: ‘Time to Retire the Rock Star Messiah Myth’

Book:

ORGANIZATIONAL BEHAVIOUR CDN 5/E

As Canada’s Environment Minister Peter Kent attempted to control emissions by setting a regulation that requires the vehicles built between 2017-2025 to cut emissions by five percent each year, Car makers faced enormous threats as they tried to design new models of passenger cars that match the standard.

Mark Nantais, the head of the Canadian Vehicle Manufacturers’ Association explained that the regulation provided Canadian car industry a chance to “harmonize with the large U.S. car industry.” Car manufacturer Toyota, also took this threat and turned it into an opportunity by adding innovation into their design. The new 2013 Toyota Prius, show-cased at the New York auto show, is a plug-in hybrid car that can be powered by the gasoline engine, as well as the electric motor.

Hybrid car is an example of the result of government regulations in a free market, which, when left alone, often strives to achieve the maximum economic surplus without considering the after effects on the environment. Government regulations can sometimes set direction and challenges to the industry. This forces the companies to become fast reacting innovators with new strategies and business plans, and in the end, the threats will eventually become a strength.

Websites:
http://www.cbc.ca/news/how-do-you-make-car-companies-innovate-regulate-them-1.1869940
http://www.cbc.ca/news/politics/new-vehicle-rules-to-cut-emissions-fuel-consumption-1.1264623

September 11,2013 marks the 12th anniversary of US’s biggest tragedy of the 21th century. However, at 12:15 pm ET,the focus of the citizens had shifted to a tweet by the AT&T Inc., which caused much rage and curse.
The original tweet showed a hand holding a smartphone with its camera capturing the Tribute in Light memorial, which featured the twin towers as two beans of light. There was also a caption that says ” Never Forget”.
The bold tweet drew immediate attention from the whole nation. Twitter users accused AT&T of “exploiting a national tragedy”, and some even threatened to switch to another carrier.
Although the tweet was replaced by an apology in just one hour, US citizen’s impression of the nation’s biggest mobile phone and fixed phone provider had been inevitably damaged.
The public had probably assumed that it is every American’s responsibility to remember and ensure that the purpose of the annual remembrance ceremony remains unchanged. However, the company’s action was not illegal under the law, and whether AT&T violated business ethics cannot be judged solely by individual’s subjective opinion.

Sources:
https://mobile.twitter.com/ATT http://money.cnn.com/2013/09/11/technology/social/att-9-11-tweet/index.html?iid=HP_LN