In both Jeremy Kuo’s blog, Who Drives Uber, and Chris Zook’s blog, Uber’s New CEO Will Have to Win on Two Fronts Simultaneously, Uber’s CEO transition has been discussed with potential issues accompanied. While Kuo focuses on the “toxic”(Kuo, 2017) workplace culture left behind the former CEO Kalanick, Zook underscores the two fields of issues that , the new CEO, has to address: inner managerial issues and external growth issues (Zook, 2017).

(Lloyd, M., 2017)

To invest Uber’s future barriers to profitability and growth, Kuo’s approach is a meaningful start since the poor reputation and infamous workplace culture will likely to cause customers to shift to other competitors in the industry. This directly links to the fourth internal issue that Zook highlights, the erosion of accountability, teamwork and trust(Zook). Another managerial issue left by Kalanick is the “lost voices from the front line” (Zook), which is a byproduct of Uber’s detrimental culture.

In addition to issues generated from Kalanick’s managerial style, “revenue growing faster than talent” and the lack of evidence in Uber’s “$68 billion valuation” still remain unsolved. Although Khosrowshahi is believed to be a trustworthy with reliable leadership, it will likely to take Uber a long time to dissolve these existing barriers. Thus, although replacing CEO is beneficial for Uber, the risk of losing its market share quickly still underlies with the growing competitions.

(Orlowski, A., 2017)

Furthermore, since Didi Chuxing has acquired Uber’s business in China (Zook), Uber has a limit on expansion, which requires a certain amount of investment into reinforcement of its current business and re-establishment relationship with existing drivers and employees. As the “highest-valued unicorn in the history of business” (Zook), Uber not only attracts investors to boost its stock price, but also a large wave of competitors into the industry, such as Lyft, which has higher driver satisfaction than Uber (Zook). Then, according to Porter’s five forces model, Uber’s industry has relatively high threats of new entry and low buyer power. Therefore, solving existing issues are not sufficient enough for Uber to sustain its dominating market share, and a greater point of differentiation is required to regain its market power in the competitive market where homogeneous service goods are offered.

In conclusion, while both Kuo and Zook explored the past and current challenges in Uber, mostly related to the workplace culture left by former CEO Kalanick, an investigation into product differentiation is needed for Uber to sustain its future growth in both profitability and scalability.

Word Count: 406

References:

Kuo, J. (2017, October 15). Who Drives Uber? [Web log post]. Retrieved November 12, 2017, from https://blogs.ubc.ca/jeremykuo/2017/10/15/who-drives-uber/

Lloyd, M. (2017, August 31). [Will Dara Khosrowshahi rein in Uber’s Napoleonic ambitions? ]. Retrieved November 12, 2017, from https://www.bloomberg.com/view/articles/2017-08-31/uber-needs-a-tim-cook-can-its-new-ceo-deliver

Orlowski, A. (2017, September 26). [Uber Fall Apart]. Retrieved November 12, 2017, from https://www.theregister.co.uk/2017/09/26/horan_uber_analysis/

Zook, C. (2017, August 30). Uber’s New CEO Will Have to Win on Two Fronts Simultaneously [Web log post]. Retrieved November 12, 2017, from https://hbr.org/2017/08/ubers-new-ceo-will-have-to-win-on-two-fronts-simultaneously#comment-section

As the news around big liquidation sale of Sears has surged on various websites, a potentially unethical business behavior is unveiled: customers found original priced tags have been replaced with a sticker stating higher price. From the picture below shows the ripped new price tag and the original price at $2 lower.

Price Tags(Biggin. V, 2017)

Through the economic lens, it can be easily explained that Sears adjusts their price due to the increase in demand. However, since the demand is created by the incentive of discounts, in other words, the promised reduction in price, re-adjusting the price of items becomes an arguably unethical action for consumer perception since the real benefit to consumers are now lesser than expected from the promotion. Therefore, some consumers see such action as a betray in trust from the retailer.

After this behavior is revealed and disclosed through media, the demand of the items will likely to decrease significantly due to the decrease in incentives from the promotion. Although other retailers may overcome the negative public image they receive from such news articles, Sears may end-up with a permanent wound, because the nature of a liquidation sale. Once customers of Sears discover such behavior and demand for sales items decline dramatically, a recover in demand usually takes longer period of time or needs higher incentive to purchase the items, giving Sears to possible paths: extend the sale period longer or increase sales percentage to reduce price furthermore. By extending the sale period longer, Sears will automatically increase the operation costs due to the requirement of labor and utilities, which results in reduced profit. Moreover, there is no guarantee that the demand of customers will last and recover after the ramp-up time. On the other hand, if Sears chooses to lower the sale percentage, although the incentives is likely to increase demand back up again, consumers may question that similar incident will occur again: even the sales is announced at higher percentage reduction, the original price may have been altered again. In short, either option will leave Sears a reduction in revenue comparing to the current promotion model.

In conclusion, the business act of Sears leaves its customers a gap of trust, which does not only costs Sears to sacrifice additional profit from the liquidation sale. Thus, despite whether the action is economically natural, it is for the consumers’ perception and decision on the boundary of business ethics, that ultimately affects the reputation and profitability of the firm in the end.

Word Count: 439

Biggin, V. (2017, October 29). [Price Tags]. Retrieved October 29, 2017, from http://www.cbc.ca/news/business/sears-canada-liquidation-sale-higher-prices-1.4373270

Harris, S. (2017, October 29). ‘Duped’: Sears shoppers allege retailer inflated prices for liquidation sales. Retrieved October 29, 2017, from http://www.cbc.ca/news/business/sears-canada-liquidation-sale-higher-prices-1.4373270

 Nasdaq, n.d.

Nasdaq, so called National Association of Securities Dealers Automated Quotations, announced a collaboration with SEB group which seeks applications of blockchain technology on mutual fund market (Aitken, R., September 2017). The project undergoes with a goal to use blockchain to establish a more reliable and efficient exchange system.

As the world’s first electronic stock-exchange, Nasdaq is also the first exchange that enabled customers to trade cryptocurrency. More recently, Nasdaq opened Ethereum for European investors. These steps allows Nasdaq to pronounce its value proposition within action:”Develop efficient and reliable technologies that orchestrate and facilitate capital markets activity”(Nasdaq, n.d.). Furthermore, with the collaboration with SEB, it is clear that Nasdaq embraces futuristic blockchain technology as tech-giants including Alibaba and Microsoft, rather than rejecting like JP Morgan.

 Ransbotham, S., April 2016

This business strategy of Nasdaq has differentiated itself from other exchanges, which positions Nasdaq as one of the pioneers in adapting blockchain in real application. Since mutual fund contains various sophisticated procedures and complex ledgers, the characteristics of blockchain allows both investors and mutual fund managers to track and proceed transaction in a simpler manner with higher precision. Thus, once the project successes, Nasdaq is able to expand it’s market share greatly with the continuously growing popularity of blockchain.

Risks and challenges are considerable heavy for this “joint project”(Aitken, R., September 2017), of course, just like Ethereum is facing an upcoming hard fork with a discovery of a “consensus bug” (O’Leary, R. R., Octobor 2017). Similar fork is also occurring for Bitcoin in November, which demonstrates a critical weakness of adopting blockchain applications, that once a technical mistake is observed, the renewal of system often requires complete updating software: resulting as a hard fork. Therefore, the real reliability and effectiveness of this collaboration still lays in question since the rick and financial cost of development may outweigh the product, until a more thorough solution can be discovered for blockchain’s software update.

After-all, Nasdaq conveys its value to investors and customers deliberately through such business decision, which allows results as a beneficial marketing outcome. Hence, to conclude, Nasdaq successfully represents its point of differentiation that reveals its value proposition through business activities, which many companies still lack.

Word Count: 422

Reference

Aitken, R. (2017, September 27). NASDAQ Collaborates In SEB’s Blockchain Investment For Mutual Funds Market. Retrieved October 14, 2017, from https://www.forbes.com/sites/rogeraitken/2017/09/27/nasdaq-collaborates-in-sebs-blockchain-investment-for-mutual-funds-market/#4ef418c3696b

Ransbotham, S. (2016, April 26). [As a technology enabling greater data transparency, the opportunities blockchain offers are immense.]. Retrieved October 14, 2017, from http://sloanreview.mit.edu/article/blockchain-data-storage-may-soon-change-your-business-model/

Nasdaq. (n.d.). [L1_Pillar_headline]. Retrieved October 15, 2017, from http://business.nasdaq.com/list

Nasdaq. (n.d.). Nasdaq’s Story. Retrieved October 14, 2017, from http://business.nasdaq.com/discover/nasdaq-story/powerful-model

O’Leary, R. R. (2017, October 14). Ethereum Developers Find Geth Bug as Hard Fork Nears. Retrieved October 15, 2017, from https://www.coindesk.com/ethereums-geth-client-finds-vulnerability-less-two-days-before-fork/

In early August, the world’s famous electric veichle(EV) maker, Tesla, annouced that the company will issue debt worth 1.5 billion to fund the Model 3 production. As Tesla has receved “455,000 reservations” (Carey, N. August 07, 2017) for the Model 3, it reveals consumers; growing interest in EVs. Simutaneously, the price of Tesla’s share has been growing rapidly from the beginning of 2017. Despite the negative retained earnings on balance sheet, Tesla gains additional paid in capital(APIC) through the thriving share price which sets the total equity back to positive. In the cash-flow statement, Tesla has arrived at negative net-income in four consecutive years, and is currently at negative 798 million dollars from the second quater report.

Tesla has demonstrated its leadership by bring a revolution on world’s energy utility trend: from fossil fuel to electric. As a result, multiple nations, including the largest developing country, China, is in progress on promoting environmental friendly policies by banning internal combustion engines(China banning internal combustion engine September 14, 2017). In other words, Tesla is seen as the driving force, by both governments and consumers, to change consumers’ behavior on energy consumption. As a response, investors’ expectation for Tesla, shown by the significant increase in share price, grows beyond merely an EV maker, but a future energy resource that will be potentially treated in similar manner as the OPECs nowadays. This faith from investors does not simply come from the increasing numbers of Teclas on road, but from the merger between Tesla and SolarCity(Ferris, R November 17, 2017).

SolarCity is a company that provides solar panels for both small scaled units, homes, to large units such as business or even government. Through this acquisition, Tesla conveyed its future direction to promote increasingly environmental sustainable products, just like CVS taking its stand on promoting public wellness via the Tabaco ban. Thus, Tesla presents its public image as a leader in new energy trend, which raises the question: are vehicles with high engine-displacement made unethical in environmental aspect?

However, all the expectations on Tesla is not sufficient to support the growing share price while Tesla continuously issue debt to balance the spend on investment activities. It is clear that the only positive number displayed on the cash-flow statement is financial actives, and it is highly possible that investors are out looking for a practical benefit being announced from the acquisition synergies as well as a return from bond issued. 

Carey, N., & Lienert, P. (2017, August 07). Tesla seeks $1.5 billion junk bond issue to fund Model 3 production. Retrieved September 27, 2017, from https://www.reuters.com/article/us-tesla-offering/tesla-seeks-1-5-billion-junk-bond-issue-to-fund-model-3-production-idUSKBN1AN13I

China moves towards banning the internal combustion engine. (2017, September 14). Retrieved September 27, 2017, from https://www.economist.com/news/business/21728980-its-government-developing-plan-phase-out-vehicles-powered-fossil-fuels-china-moves

Ferris, R. (2016, November 17). Tesla and SolarCity merger gets approval from shareholders. Retrieved September 27, 2017, from https://www.cnbc.com/2016/11/17/solarcity-shareholders-vote-on-tesla-merger.html

Business’s ethics, normally argued around whether a firm ought to make as much profit as possible for its shareholders that only allows it to follow the basic laws and regulations, or take a step back to participate its social responsibility with certain amount of sacrificed profit. (1) Taking the incidence happened 2016 as an example, when the Note 7 from Samsung, was recalled twice after encountering flaming due to battery’s malfunction. The complete recall was announced in October 2016, and the investigation result was announced in January 2017, clarified reasons for the incidences.

As the first incident was caused by deflection of negative electrode and the replacement battery, after first recall, had high welding burrs affecting negative electrode, there were even missing insolation layers from the replacing battery. (2) Although Samsung stepped into its responsibility quickly and regained trust from the market in 2017 with a 2% increase in market share in handheld phone division (6), it raises the question mentioned in the beginning of this post: should a firm make as much profit as possible by merely following basic laws and regulations, or participate more in its role of social responsibility with certain amount of sacrificed profit?

It is clear, after the intensive laboratory investigations, that Samsung is fully capable to establish the “8-Point Battery Safety Check”(3) before the incidences occur. If the business is fully capable and ethically obligated to ensure public wellness related to its consumers, why weren’t these safety inspections applied in the first place? Since these safety checks are required for each individual phone manufactured, the cost will rise, and the profit will drop, which is unlikely to be agreed by the board of directors if incidences had not happened. Thus, obviously, although Samsung’s CEO, Oh-Hyun Kwon claims to “endorse the UN Sustainable Development Goals (UN SDGs)”(5), profit might still be overweighed before the Note 7 recalls. 

However, as a contract to the prediction profit decline through increasing cost with the safety concern, in first quarterly report, Samsung’s profit inclined (6). The Samsung’s reaction, from recalls to sharing testing results to “global standardization bodies”(2), shows how a firm step into its social responsibility and starts to create social value rather than simply maximizing profit. By taking the perspective to see solutions for social challenges as opportunities for profits, Samsung has achieved the 2% increase of market share in its cellphone division as well as the increase in revenue within an annual quarter (6), demonstrating a positive response to the social responsibility it took with the incident.

Work Cited

1. http://www.investopedia.com/terms/b/business-ethics.asp
2. https://www.forbes.com/sites/maribellopez/2017/01/22/samsung-reveals-cause-of-note-7-issue-turns-crisis-into-opportunity/#9ccf9c24f12d
3. http://www.samsung.com/us/explore/committed-to-quality/
4. https://www.nytimes.com/2016/12/14/technology/personaltech/biggest-tech-failures-and-successes-of-2016.html
5. Samsung. Samsung Electronics Sustainability Report 2017. 2017. Web. 12 September 2017
6. Samsung. 1Q Interim Business Report. 31 March 2017. Web. 12 September 2017