In Simran Cheema’s blog post, titled “Looking to Flee the Fee,” she describes how in 2014, Canada’s two largest airlines: Air Canada and West Jet, introduced a $25 charge for the first piece of checked luggage for customers flying within Canada and the U.S. In recent weeks, a class action lawsuit has sprung up, alleging both Air Canada and Wes Jet of colluding together to levy this baggage fee. The plaintiff’s in this court case want the airlines to refund the $25 fee that they charged to passengers since 2014.

(Source: Global News)

As a frequent flyer myself, I find it inconvenient that these two airlines are levying these ridiculous costs onto us consumers, seeing that we already pay so much for our tickets. That being said, does it really matter what we think as consumers?

Air Canada and West Jet are Canada’s two largest airlines, dominating the domestic market for air travel, and there is no escaping them if you plan on travelling anywhere across Canada. By these standards, it is almost justifiable to say that the aviation industry in Canada is an oligopoly, meaning that there are few suppliers that exist within the market.

Now back to my original question: does it matter what we think as consumers when it comes to these high costs? Upon analyzing Porter’s Five Forces, I realized that consumers have little influence on these airlines since they nearly dominate the Canadian air travel market. For example, when looking at supplier power, we must consider how many suppliers are in the market. As mentioned above, there are only two. Since these two airlines are quite similar in the services that they offer, and are in my opinion, equally terrible, there is very little competitive rivalry among them, and a very low threat of substitution. Finally, when looking at the threat of new entrants, it is actually quite low considering how difficult it is for new airlines to enter the Canadian air travel market; they must buy aircrafts and be registered with Transport Canada.

Porter’s Five Forces (Source: Applying Concepts)

Other airlines, such as NewLeaf, have sprung up as a response to the high prices that Air Canada and West Jet offer. However, NewLeaf has been unsuccessful in competing with these larger airlines, since they only offer service from smaller airports across Canada.

NewLeaf’s slogan (source: Inside Vancouver)

Taking all of this into account, I believe that Air Canada and West Jet are making a smart business move with their $25 baggage fee, in terms of increasing their profits. Although it comes as a burden to customers like you and I, there is little that we can do to substitute their services, unless of course we choose an alternate mode of transportation.

Wordcount: 449

Works Cited:

Cheema, Simran. “Looking to Flee The Fee.” Simran Cheema’s Blog. UBC Blogs, 28 Sept. 2016. Web. 30 Oct. 2016. <https://blogs.ubc.ca/simrankcheema/2016/09/28/looking-to-flee-the-fee/>.

Harris, Sophia. “Air Canada, WestJet ‘colluded’ to Charge Checked Bag Fee, Proposed Class Action Alleges.” CBCnews. CBC/Radio Canada, 27 Sept. 2016. Web. 30 Oct. 2016. <http://www.cbc.ca/news/business/class-action-checked-bag-fee-air-canada-westjet-1.3779257>.

Leslie, Carrie. “NewLeaf Travel Announces Cheap Flights Across Canada.” Inside Vancouver Blog. Tourism Vancouver, 7 Jan. 2016. Web. 30 Oct. 2016. <http://www.insidevancouver.ca/2016/01/07/newleaf-travel-announces-cheap-flights-across-canada/>.

Mortillaro, Nicole. “Air Canada, WestJet Rank as Least Satisfying Canadian Airlines According to J.D. Power Study.” Global News. Global News, 16 May 2016. Web. 30 Oct. 2016. <http://globalnews.ca/news/2700131/air-canada-westjet-rank-as-least-satisfying-airlines-according-to-j-d-power/>.

Peyeti, Jinu. “Applying Concepts.” Porter’s Five Forces – Analysis of the Daily Deals Market. Blogger, 14 Dec. 2011. Web. 30 Oct. 2016. <http://applyingconcepts.blogspot.ca/2011_12_01_archive.html>.

Ethan Tam’s blog post, titled “The Fight For Fifteen,” describes the implications that would result from an increase in British Columbia’s minimum wage to $15 an hour. Although his article uses great economic theories to argue against a hike in the minimum wage, it falls short of addressing social issues, such as poverty, that affect thousands of people across the province, bringing into question issues surrounding ethics.

(Source: CBC)

One of the major arguments against raising the minimum wage is that it will force companies to lay off many of their employees as a result of higher operating costs. However, opposing reports suggest that this is not at all the case; a change in the minimum wage has little to no effect on employment once one factors in the net benefit of implementing such a measure. According to a Forbes article published last year, “the change in cost is largely offset by the change in demand and other factors.” In other words, although it will cost firms more to support their employees (variable costs), the overall increase in demand for their products as a result of greater consumer buying power will, in turn, increase their revenues, allowing them to operate sufficiently at their current levels.

Proponents of increasing the minimum wage, such as Bernie Sanders, argue that the underlying purpose of raising minimum wage is not to increase employment; rather, it is designed to protect those who are most vulnerable in society, which would be considered by many to be the ethical thing to do.

Still not convinced? Recall how we first learned about business ethics on the third day of COMM 101. Think of the government as one large firm, who provides a service to its stakeholders (its citizens). According to Milton Freeman and his Stakeholder Theory, businesses must create value to their customers, suppliers, employees, and communities in such a way that advances the values of these key clients. Similarly, governments are responsible to their citizens and the values that they share.

With the cost of living being so high in BC, it is no doubt that raising the minimum wage would benefit those who are struggling to make ends meet in the province, while also advancing the public agenda of the government in power. In my opinion, inflation is a powerful economic force that will always exist, even in a society free of government price flooring regulations. Therefore, it is only in the social interest of society for governments to keep up with inflation by increasing the minimum wage every now and again.

Word Count: 424

Works Cited

Associated Press. “Minimum Wage in Ontario Is Still at a Minimum, Critics Say.” CBCnews. CBC, 30 Sept. 2016. Web. 16 Oct. 2016. <http://i.cbc.ca/1.3318437.1447448883!/cpImage/httpImage/image.jpg_gen/derivatives/16x9_620/fast-food-protests.jpg>.

DardenMBA. “Stakeholder Theory.” YouTube. YouTube, 13 May 2009. Web. 11 Sept. 2016. <https://www.youtube.com/watch?v=Ih5IBe1cnQw&feature=youtu.be>.

Harvey, John T. “The Real Argument For Raising The Minimum Wage.” Forbes. Forbes Magazine, 31 July 2015. Web. 16 Oct. 2016. <http://www.forbes.com/sites/johntharvey/2015/07/31/real-argument-for-raising-minimum-wage/#15317c963d97>.

Tam, Ethan. “The Fight for Fifteen.” Ethan Tam’s Blog. UBC Blogs, 2 Oct. 2016. Web. 16 Oct. 2016. <https://blogs.ubc.ca/etam/2016/10/02/the-fight-for-fifteen/>.

Snapchat has recently launched a new line of wearble technology in the form of sunglasses, dubbed as “spectacles,” by the popular photo sharing app. This new product has the ability to be a great new transient advantage for the company moving forward.

In the article “Snapchat Moves In Where Google Glass Gave Up,” the author speculates that this new product will be a growing success for the long-time software company. In more detail, it describes how historically, companies who have marketed their products to younger generations tend to be more successful. Snapchat is doing this by creating trendy, reflective sunglasses that work together with their already popular social media app, allowing its users to capture short, 10 second videos which they can share with their friends.

(Source: Engadget)

Google has already created a similar product, known as Google Glass, back in 2014, which did not generate nearly as much excitement from consumers as the internet software company had expected. Part of this may have been because the company lacked a mainstream marketing campaign that could appeal to consumers. Having spent presumably hundreds of millions of dollars developing Glass, Google should have spent at the very least $10 million explaining it. In addition to that, Google Glass was selling for up to $1,500, which was in no way affordable for something that had the same features as a smartphone.

In contrast, Snapchat is selling its “specs” for up to $130, which allows it to expand its target market to people of all incomes. Tying this together with the trendy look of the glasses, and its ability to work with the already popular app, I am convinced that this new product will be a growing success once it launches into retail markets.

This new product line is important for Snapchat if it would like to maintain its already competitive advantage well into the future. Companies have come and gone over time as a result of newer, cooler innovations. By re-inventing itself, Snapchat is adding value to its stakeholders in the already competitive market.

My advice for Snapchat is to learn from Google’s failures and to implement an effective marketing campaign for their new product line; rather than solely relying on the product’s ability to sell itself. This can easily be accomplished by taking advantage of their app by sending out an ad campaign to its users. Whichever course of action the company takes, it is key that they market this product, as to show value to its customers.

Word Count: 409 words

Works Cited:

Yu, Howard. “Snapchat Moves In Where Google Glass Gave Up.” Forbes. Forbes, Inc, 1 Oct. 2016. Web. 2 Oct. 2016. <http://www.forbes.com/sites/lizryan/2016/10/01/ten-things-you-shouldnt-have-to-do-to-get-hired/#7a053fb0150c>.

Reynolds, Siimon. “Why Google Glass Failed: A Marketing Lesson.” Forbes. Forbes, Inc, 5 Feb. 2015. Web. 2 Oct. 2016. <http://www.forbes.com/sites/siimonreynolds/2015/02/05/why-google-glass-failed/2/#1f47292d6d8c>.

Moon, Mariella. “Snapchat to Release $130 Camera-equipped Spectacles This Fall.” Engadget. AOL Inc., 23 Sept. 2016. Web. 02 Oct. 2016. <https://www.engadget.com/2016/09/23/snapchat-spectacles/>.