“An economy is only as good as its supply of talent” IBM’s vice-president of innovation and relations with universities said in a Globe and Mail report. This captures the necessity for companies to give proper acknowledgement to the minds that allow their business to grow- and continue to do so.

Innovation is not encouraged the same way corporate efficiency is. Narrow management hierarchies that segment workers and create bureaucracy often only serve to marginalize the creative centres in a company. As Zappos has proven with its revolutionary corporate culture of “play hard, work hard”, it pays to treat your employees well. In the technology industry, where the mind of engineers and designers are essential for a company to remain competitive, recognition must be given. Rewarding innovators with vacation time or bonuses not only serve as incentive to stay loyal to the company (as creative minds are in high demand), but also gives them the leisure to create new ideas, products etc. Keeping research and development teams under constant pressure from budget and time constraints often results in decreased productivity, and ultimately, less profits. So as IBM’s VP says, “We need to get back to treating technologists as rock stars.”

Talent techies deserve ‘rock star’ treatment: IBM

This is in response to Ryan Un’s blog post “Is Microsoft in Trouble?”

From eexploria.com

Most of us have a tendency to associate Apple with glossy, modern technology and Microsoft with software for computers of the past. In the past few years, as Ryan points out, this trend has been reflected in Microsoft’s hugely declining profits. With an increasing number of the younger generation purchasing technology for reasons other than functionality, Microsoft is struggling to appeal to “cool” crowds.

Even with the release of Windows 8 and the Surface tablet, Microsoft is just too little, too late in the market. Its products and system are looking increasingly like Apple copycats, and unless Windows can offer some serious brand value to consumers, its products will be unable to pull Microsoft out of the red. Microsoft needs to focus on competing against rivals through product quality, system superiority and differentiation from Apple. Moves such as opening Canada’s first Microsoft store with a remarkably similar layout to the Apple store in the same mall will only communicate to consumers that its product is the same as Apple’s, only without the brand association. Apple grew because it was radically different than existing products in the market and if Microsoft should take anything from its rival, it should be just that.

The Globe and Mail report on Microsoft’s new store:

http://www.theglobeandmail.com/globe-investor/new-microsoft-retail-store-aims-to-establish-cool-stuff-factor/article5353443/?service=mobile

This is in response to Andrew Winston’s blog post on his Eco-Advantage blog.

Economics 101: consumers want to maximize utility. Unfortunately for manufacturers, this means that most customers are not willing to pay premium for sustainably produced or environmentally friendly products. However, the “green” movement is very real, as Andrew points out, so-called conscious buyers, “which are quickly becoming the majority of consumers, not a niche segment, want it all… They demand more sustainable products at the same or lower price.”  

Levi’s new Water< Less line of jeans.

Luckily, adopting sustainable processes has usually resulted in financial benefits. Levi’s recent line of Water<Less jeans reduces the amount of water needed to produce a pair of jeans from 42 litres to as little as 1.5 litres, so far, this has saved 172 million litres of water, according the the company’s website. Levi’s line of jeans also costs no more than its regular line, boasting a new ‘sustainable’ value proposition towards “conscious” consumers. Also, in the process of cutting water use, Levi’s was forced to revisit old manufacturing practices and adopt new, more efficient techniques. In the end, this move benefits everyone: Levi’s profits increase due to decreased water use and manufacturing time, consumers aren’t forced to pay premium, and environmental impact is greatly reduced. The stigma that going green costs too much is wrongly deserved. Most consumers want to help the environment and most companies want to increase profits, so why don’t more follow in Levi’s footsteps?

A review of Levi’s Water<Less jeans: http://www.businessgreen.com/bg/review/2079960/water-levis-water-jeans

The Eco-Advantage Blog: http://www.eco-advantage.com/blog.php

Energy Aware, the brainchild of Sauder graduate Janice Cheam could the way energy companies make money. The company’s Power Tab in-home display system is a wireless system that communicates with utilities meters monitor energy consumption in real time, encouraging consumers to use less energy.

The Power Tab system displays real-time energy consumption in kWh and dollars.

It may seem as though utilities companies cannibalize their own business.  However, currently, due to delayed or inaccurate meter information, BC Hydro must transmit more energy than is needed to ensure every customer is supplied. Since the Smart Meter is required for the Power Tab system to function, customers are incentivized by energy savings to replace their old meters. This will allow BC Hydro to better collect energy use data and streamline energy distribution, reduce energy theft, improve outage response, and ultimately lower operational expenses by wasting less energy. By capitalizing on the desire for both customers and suppliers to save money, Energy Aware has the ability to enter almost every market. If it is able to partner with companies in countries such as China or India, the company could encourage even more energy-saving innovations- generating profits for itself, and its customers.

For more on the business case for Smart Meters, see:

http://www.bchydro.com/etc/medialib/internet/documents/smi/smi_business_case.Par.0001.File.SMI-Business-Case.pdf

While Hurricane Sandy won’t seriously affect the economy, its financial toll is just beginning to take effect.

The force shut-down of business activities on Monday have caused disruptions in supply which are “likely to linger through the rest of the week”, as well as many idled workers- creating even more losses as businesses try to rebuild after the storm. Retail will suffer the most from Hurricane Sandy as consumers will have spent a good deal of disposable income in preparation for the storm, and will have less ability to purchase non-essential goods. Further, November is the beginning of the holiday season, and with consumers spending on rebuilding or insurance costs, retailers, as Burt Flickinger III of retail consultancy Strategic Resource Group predicts, “could lose at least $25 billion in sales this week”. Supply issues associated with damage to factories and the shut-down of six large oil refineries in anticipation for lower demand post-storm could further drive costs for business upwards. The financial damage caused by Sandy could prove to be far greater than the cost of damage to infrastructure and property, as lags in the supply-chain could drive the price of goods up and further discourage consumer spending during the holiday season.

The Daily Finance reports: http://www.dailyfinance.com/2012/10/30/economic-impact-from-hurricane-sandy-wont-derail-economy/

Cineplex Odeon theatre in North Vancouver.
Source: http://www.ctvnews.ca/entertainment/cineplex-earnings-soar-company-cashes-in-on-premium-ticket-prices-1.909573

The middle-age adult population has less leisure time than ever, and most of that time is not spent at the movies. In a recent move by Cineplex, three reserved screens and an exclusive five-screen facility will be unveiled to target adult-moviegoers.

Cineplex’s move to increase profit in face of stagnating ticket sales has potential to change the movie industry. By targeting a very specific segment of the population with an attractive value proposition of a kid-free ‘escape’ from reality, Cineplex has created a definitive point of difference from other theatres. With “premium tickets” currently comprising 36% of Cineplex’s box office, it isn’t a stretch to say patrons would be willing to pay extra for adult-only privileges.

With the cost of movie tickets creeping towards the twenties, movies are becoming less attractive to adults with limited time and budgets. Pairing an exclusive setting complete with traditional “date-night” amenities such as alcohol and dishes cooked by a corporate chef should allow Cineplex to capitalize on the desires of adults to make the most of their time off.

Would you be willing to pay extra for a “VIP” movie experience?

Why Cineplex put the adult back into entertainment- The Globe and Mail

This post is in response to Mingchi Choo’s post about McDonald’s vegetarian restaurant venture here.

McDonald’s name is associated with more than beef. The chain’s popularity draws on prices and convenience, which are marketable regardless of what is in its sandwiches. McDonald’s recent move to set up vegetarian restaurants in India shows just that.

McDonald’s seeks to cater to local tastes in its expansion into India.

Opening a line of vegetarian restaurants with items friendly to both beef eschewing Muslims and pork eschewing Sikhs, especially on holy sites is differentiation that could prove hugely profitable. Opting to establish a vegetarian-ized version of McDonald’s allows the company to add to its current value proposition of quick meals at low prices and expand its target market to include culturally sensitive areas. Currently, McDonald’s prices have deterred Indian customers used to buying few rupee samosas, but with India’s rapid development, household income will increase- making fast-food a more attractive option. Will McDonald’s ‘beefed up’ reputation affect Indian patronage? Not likely, as the company entered India with the local culture in mind. None of the Golden Arches’ Indian menus offer beef, instead choosing to serve customized versions of classic American burgers. McDonald’s latest venture once again shows the chain’s ability to “cater to local tastes without losing its brand image” and will likely prove profitable as “India [is] expected to overtake China for the position of the country with the largest population.”

McDonald’s Targets Indian Pilgrams

SiriusXM Canada, the satellite radio company formed from Sirius and XM Canada, has been consistently in the red, posting $2.6-million loss in its most recent quarter.

SiriusXM would do well to keep its current position rather than try to compete with internet radio. Since “Internet radio and radio that is available on wireless devices are complementary services to commercial radio”, convenience and choice are losing power as selling points for satellite radio. However, some consumers still favour traditional in-car radios over online streaming. SiriusXM’s only hope of growth seems to be in targeting the millions of non-subscribers with satellite radio installed in their vehicles. No installation fee and a free trial could be enough to encourage customers to explore its exclusive access to entertainment networks.

Exclusive American programming like The Howard Stern Show currently bring in the majority of SiriusXM’s customers, but the addition of local talent could create interest among Canadian entertainment supporters. However, in order to retain customers, SiriusXM should improve the interface of its in-car system before working on its internet player to prevent its main product from being seen as out-dated. A plus is that with a near-monopoly in satellite radio, SiriusXM has the potential to build a strong customer base if it targets the right demographics.

Interview with SiriusXM CEO Mark Redmond

Money-losing Sirius

The proposed $3.4 billion acquisition of Astral Media by BCE Inc. has media giants on high alert. If the deal is approved by CRTC, it would leave Bell Media in control of more than 100 radio stations and almost 90 television channels. Bell’s closest competitor, Shaw, owns just 18 specialty channels and one network.

The major issue of BCE’s takeover of Astral is one of media concentration. If Bell becomes larger, chances are that companies that rely on Astral’s content or Bell’s networks will become marginalized or forced to accept unreasonable deals with Bell in order to keep their services running. If the BCE-Astral deal goes through, Bell will have 33.5% control of English-language television and the capacity to eliminate most domestic competition, which is essential in a market economy. Without a diverse market, there is nothing stopping Bell from charging higher prices for its services, or withholding content from competitors. With strict CRTC regulations against foreign ownership, Bell would have the capacity to run the market as they wish.

If the CRTC allows the transaction to go through, stricter regulations must be put into place against content hoarding to ensure that Bell does not have exclusive rights to content that other service providers rely on. With honest competition, Bell’s expansion could be good news for local film and TV companies, which could gain competitiveness in areas like online entertainment and target a larger audience. In the case that Bell fails to obey market rules, both consumers and competing companies will pay the price.

As BCE pursues growth, competitors cry foul

Apple has dealt the latest blow in its fight against competitor Google with the release of its iPhone 5.

Apple’s mapping goes in the wrong direction- The Globe and Mail

By dropping Google Maps, Apple has made a huge dent in Google’s core business “because about 40 percent of mobile searches are” location related. This will negatively affect Google’s advertising, putting it at risk of losing businesses that depend on it to literally put them on the map.  According to Canalys, a research firm, “60 per cent of smartphones run Android, versus 34 percent for iPhones”, but iPhone users account for half of all traffic to Google maps. By transferring that to its own maps application, Apple could generate even more profit through location-based advertising. By better integrating location services into future iPhones it could keep the anticipation for new phones (and stocks) high.

Apple’s iPhone 5 sold 5 million units within three days of its release.

Apple Maps could help Apple to conquer more of the tech world.  With its own program, Apple has the potential to optimize and customize maps for its products and services to further highlight its value proposition of power in simplicity.

Will Apple maps get you going in the right direction? Probably not, but Apple’s move in dropping Google is the right step in its climb to the top.

Apple’s feud with Google is felt on iPhone- The Economic Times

Apple iPhone 5 fever rages despite grumbling over maps- The Economic Times