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The e-cigarette industry is worth about 2 billion dollars in the United States alone, where these types of cigarettes are legal. The Canadian government however has deemed this substance as illegal, but that doesn’t stop people from buying and selling this product in the black market.

Essentially the product is a cigarette-shaped electronic device that converts liquid nicotine into water vapour, delivering a smoke-like hit of nicotine, without the actual smoke. This cigarettes are available in a variety of “e-liquid” flavour cartridges — from banana cream and Earl Grey tea to an ersatz version of du Maurier cigarettes — and their preferred strength of nicotine. But without all the dangerous cocktail of 4,000 chemicals, such as carbon monoxide and arsenic, found in real cigarettes. So they are better for the smoker (99% better for you than the standard cigarette) and the people around you, and besides they are much cheaper than real cigarettes. That’s not all this new cigarette does not yellow teeth, give off a bad smell or ruin your hair and nails.

Even though Health Canada prohibits the sale of these new (and better) cigarettes the at the moment I believe in the future the market for these e-cigarettes is going to be very successful. Experts predict that the sales of this product might even surpass the sales of a regular cigarette.

Read more about this new fad down below:

http://business.financialpost.com/2013/11/16/how-e-cigarettes-have-become-a-very-wild-west-industry-in-canada/

http://www.theglobeandmail.com/life/health-and-fitness/health/doctors-raise-the-alarm-over-e-cigarettes/article14763867/

Watch famous actress Katherine Heigl introduce this new product on a talk show:

https://www.youtube.com/watch?v=lE6i5PkZyRk 

By now almost everyone has heard of Snapchat. You may not personally have the app but your friends have it and are trying to get you to try it. The company’s consumer base continues to grow everyday, it’s already very popular with the young adults, but older customers are also trying out this new app. However Snapchat has no reported revenues to date but it has received about 94 million dollars in funding already. And about 350 million snaps are being shared per day and that number continues to increase. Facebook who is losing it’s teenager consumer base has offered to buy out or get rid of this upcoming company. They’ve tried to imitate the app by making something similar called the Facebook Poke but that was ridiculed for copying Snapchat and ultimately not successful, since Snapchat was first in the market for providing this service. Then Facebook tried to buy the company for more than 1 billion dollars but it was quickly turned down by Spiegel the CEO of Snapchat. And now recently it has offered to buy the company, that produces no revenue, for 3 billion dollars! Again the proposal was rejected. Snapchat is not interested in being bought out just yet, the founders are waiting till next year since they believe that their company will grow and therefore be more valuable later on.

Check out Avani’s (a fellow Sauderite) perspective on Snapchat here

Get more info about snapchat here

Read more about the Facebook offer here

As I covered in my last post about the issues with recent Lululemon products, a response has now also been issued. Lululemon founder Chip Wilson says the durability and quality of the $98 yoga pants is no different than before. Instead he believes that his loyal customers are too big for the pants. He told Bloomberg TV in Vancouver “that some body types just don’t work for certain pants, and he believes that some women may be trying to squeeze into smaller sizes.”

Check out the video below to hear more of Mr. Wilson’s comments:

watch?v=ePVAAmk12qQ

I personally think this story ties in with a lot of aspects from class. One because it’s Lululemon and it’s usually the most talked about company in class for it’s innovation, customer service, design and philanthropy. Secondly it has a lot to do with brand awareness, costs, and of course ethics. However this story could really hurt Lululemon since it might lose a lot of customers. But on the other hand many customers might not really care because Lululemon caters to a healthier more fit body type and for that customer base it works.  It is not required for the company to cater to larger women, but as the reporter said play nice.

Read more on the story here:

http://www.cbc.ca/news/business/lululemon-founder-chip-wilson-says-pants-don-t-work-for-some-bodies-1.2417980 

Candice (a fellow student) also has a very informative post about this issue. Check it out here!

Because of the recent controversy for the Vancouver-based company, from sheer pants, to pilling, and competition with other more affordable yoga brands, most people would think that Lululemon is in trouble. Yet experts believe that it will take a lot more than that to bring down this clothing giant. They say that even with all the bad press the company has been receiving, it will continue to do well since they have a a very reliable and established costumer base. We have learned extensively how companies deal with these types of issues in class and I think Lululemon has responded well. And it is also not that concerned about these issues since it is confident that their established customer base will stay loyal. This shows us how important it is to firstly build a good consumer base not only when starting a company but also to keep it running. Some recent issues the company has to deal with are explained below.

1. Sheer Pants and Pilling

Lululemon Athletica just got over the massive complaints received by their loyal customers about the transparency of their yoga pants, and now there is a new problem: pilling. The $10 billion yoga apparel company suffered a huge blow in back in March when it had to recall 17% of their pants costing the company almost $67 million in revenue. Customers bought replacements, but now they are complaining about pilling on the same $98 pants. Several people who said they have been loyal to Lululemon for years lamented that the quality of the brand’s yoga pants has declined over the years.

“I’ve been addicted to Lulu for years and have a TON of it! I can tell you in my opinion the quality is gone,” a customer wrote on Oct. 4. “Fabric is much thinner and now pills.” Read more here.

2. Athleta vs. Lululemon

Many new yoga apparel companies are entering the market and they could be a possible threat to Lululemon. For example Athleta has introduced a yoga pant that is almost identical to the Lululemon yoga pant but it’s $30 cheaper. Some analysts wonder whether Lululemon’s pricing will remain sustainable as the yoga apparel market gets increasingly competitive. Many customer reviews for the Athleta brand top Lululemon and many customers believe Athleta might even have better quality. But why is Lululemon not terrible concerned? An expert says “that even thought these reviews are troubling they don’t spell disaster for the company —  yet.” “Athleta is gaining traction at the expense of Lululemon,” she said. “But at the end of the day, [Lululemon] really has this devoted fan base that’s going to carry it.” Read more here.

Sources:

http://ca.finance.yahoo.com/news/lululemon-customers-brands-yoga-pants-210235635.html

http://ca.finance.yahoo.com/news/why-lululemons-yoga-pants-cost-213753120.html

The Canadian multinational transportation company’s shares took a hit on Thursday after delivering poor third quarter results on October 30th. As learned in Class 17 from the Finance students from the PMF (Portfolio Management Foundation) many companies suffer from share prices falling after they release their earning statements, since they are usually lower than expected. Bombardier also did not give any information to the market on when it’s new aircraft was expected to enter into service. They only mentioned that they are still consulting suppliers and customers, but the flight of the aircraft has been delayed by more than eight months. Bombardier management has said that, “flight testing is going according to schedule and that they will get back in a couple months to show where the schedule will be”. I think management needs to provide more information on this issue and also on how they can work on increasing profits if they want their share price to stop decreasing.

I think this news story fits well with what we learned last class since it talks a lot about share prices and the stock market. The tools on how to use google finance were also very helpful since they allowed me to look in more detail into Bombardier stock.

Read the original article for more information:

http://business.financialpost.com/2013/10/31/bombardier-inc-profit-misses-expectations-as-aerospace-disappoints/ 

And if interested check out Bombardier’s current share price on Google Finance: 

http://www.google.ca/finance?q=TSE%3ABBD.B&ei=JAV0UrjJGcOsqgHJAg  

Apple became the world’s No. 1 company with the best brand value. This is a big deal especially when  it’s competing with all different types of companies, from McDonalds, Samsung, Intel and Google this is surely something Apple can and will brag about. Apple took over the top position from Coca-Cola because of it’s unique deign, performance and customer service. Apple’s brand value jumped 28% to US$98.3 billion and Google came in second place at US$93.3 billion. The Coca-Cola Co. lost the top spot after 13 years to third place at US$79.2 billion. The brand value is determined by examining the company’s financial performance and how they influence customers to buy their products. As expected technology names saw the greatest change in brand value. Google and Samsung both saw an increase in their brand value. But, Nokia, Yahoo and Blackberry all saw very large declines in their brand values.

I think this article is good because it quantifies what we have learned in lectures over the past month. We’ve focused a lot on how to improve brand value and the tools we can use to increase it. I believe this article shows how to measure it and how important is actually is. I think it also relates to the finance lecture since it shows us how revenue plays into brand value.

Read more on this story:

http://www.nytimes.com/2013/09/30/business/media/apple-passes-coca-cola-as-most-valuable-brand.html?_r=0

Everyone has now probably heard about the new iPhones that Apple released last month. More specifically called the iPhone 5S and the iPhone 5C. This move by Apple to introduce a more affordable phone by their company into the market has critics and competitors wondering about Apple’s market share.

Apple is known as the company that “breaks the rules [and] changes the world”, and when that company starts to offer lower, cheaper prices the high class value just does not apply. Even though the iPhone 5C is by no means affordable it is seen or portrayed as a cheap alternative to the iPhone 5S.

I personally think Apple made a mistake by offering two relatable products into the market at the same time. We went over these concepts when we learned about Porter’s Five Forces. Even though that tool is used more for when companies try to enter a specific market I think we could use the same ideas for this new iPhone 5C as well. I think the threat of substitutes and rivalry are the main concepts that can be applied to this situation.

Read more about Apple here:

http://www.bbc.com/capital/story/20130904-the-end-of-apple-as-we-know-it 

Air Canada has been able to cut down on costs considerably over the past year which has caused their stock price to soar. Not only that but the company has also been able to fill their airplane seats by at least 86%. And putting the two together has caused the share price of the company to increase by a whopping 50% since last August. Mr. Doerksen, a National Bank Financial analyst, has said ” The company’s cost performance is outperforming expectations.” His statement shows that many experts are quite surprised at how Air Canada has been able to bounce back. I think these decisions and outcomes will really benefit the company in the future by not only improving their profits but also to help finance the new aircraft in the coming years.

I think that this story fits well with what we have been covering in class so far, since it showcases the benefits of cutting costs and maximizing profits. I understand that most of the work to cut down costs would be carried out by the Accounting team and they would’ve used tools such as financial statements to make these decisions.

Read the full article here:

http://business.financialpost.com/2013/10/04/air-canada-continues-to-soar/

Chief Executive Kevin Plank certainly thinks so: “We believe we’re a … $10 billion brand that is doing $2 billion in business today,” he said. And he could be right. The company has had quite the year in 2013; their stock price has risen up by 35%, and they have seen at least 20% revenue growth from last year.

At it’s current pace experts predict that Under Armour would surpass the $10 billion mark in 2020. The company plans to reach it’s goal by selling to a larger consumer group and by expanding globally.

I believe that Under Armour could use the SWOT Analysis to determine how they can reach their goal even faster. This tool we learned and used in class can be used for even the biggest of corporations. Nike has a long-term growth rate of 11% whereas Under Armour has 21% long-term growth rate. So for young investors who are willing to take some risk should definitely invest in UA, but if you want to play it safe then Nike is the stock for you.

Read more about Under Armour’s success here: 

http://www.forbes.com/sites/monteburke/2013/09/17/under-armour-billionaire-kevin-plank-has-had-a-very-good-year/

http://www.businessweek.com/articles/2013-09-11/under-armour-ceo-aims-at-nike-adidas-and-10-billion

http://www.cnbc.com/id/100925505

Image from:

http://2.bp.blogspot.com/-lkoek6YewA8/UDGZsa0u_KI/AAAAAAAAGaY/qBch0LdFPYM/s640/rumor-nike-to-buy-under-armour-1.jpg

In an average day we are exposed to approximately 3,500 marketing messages, and 99% of them make no impact on us. So how can marketers create ads that stand out? Well some big name marketing companies decided to test the shock technique. Show the public something provocative, edgy, unpredictable, something that sparks a reaction.

But sometimes an advertisement that is “cool” or “hip” can also be seen as offensive to some. For example the commercial (below) directed by Tyler the Creator for Mountain Dew sparked quite a controversy. The ad was criticized for portraying racial stereotypes and downplaying violence against women. PepsiCo the owner of Mountain Dew did eventually pull the commercial upon realizing how some people could find it offensive. Later PepsiCo and Tyler’s manager also issued apologies, stating that the ad was not meant to offend, but it “was only an absurd story not meant to be taken seriously.”

https://www.youtube.com/watch?v=28XrdxRyhf0

Even though it’s tough to market products these days, companies need to be more aware of the audience that they are presenting to. And if mistakes are made they need to take full ownership of the issue like PepsiCo and offer a sincere apology and make good promises to ensure that it does not happen again in the future. By taking these steps it not only helps them keep up their good reputation but it will also not negatively impact the sales of their product.

Sources:

http://www.billboard.com/biz/articles/news/branding/1560125/updated-pepsi-pulls-mountain-dew-ad-helmed-by-tyler-the-creator

http://finance.yahoo.com/blogs/the-exchange/companies-issue-mea-culpas-offensive-racist-ads-143152385.html

http://www.cbsnews.com/video/watch/?id=50146033n

http://www.theguardian.com/media/2005/nov/19/advertising.marketingandpr