After reading Yue Zhang’s post on the sale of Motorola to Lenovo I started thinking about politics effect in marketing and business. Politics has great effect on how business is done overseas. Regulations, tariffs, and laws hinder a lot of business opportunities and a very obvious one would be Canada’s prevention of a foreign investor, China, from large investments in the oil sectors (Gault, 2014). The Canadian government has regulations that are preventing Chinese Companies from acquiring oil and energy companies. Chinese companies have been suspicious that Canada is deliberately making it tough for Chinese companies’ acquisitions of oil and energy companies to pass through reviews. I understand that the Canadian government may be cautious to pass through massive acquisitions by state-backed companies from China, but it’s consistent denial of the acquisitions aren’t bringing them a reputation of being good international business destination. Canada has most of it’s oil and energy exported to USA, but USA may not always keep the importing of oil and energy from Canada at a consistent amount. If Canada leaves an unforgettable bad experience for China, then perhaps future negotiations may not go as smoothly as they could. Let’s not even think about China innovating new methods to sustain the energy and oil needs in their country and perhaps taking their vision completely away from Canada to Middle East. Canada should in my opinion stay on good terms with China since China is a major player in the international market. Another interesting fact that occurred due to the strict regulations in Canada is the new method China came up with in response to their perceived suspiciously tough reviews of their acquisitions. China may just decide to purchase land and develop the oil and energy sites themselves, since land acquisitions are more lenient than company acquisitions (Vanderklippe, 2014). Perhaps Canada may have to reconsider their decisions and plan for targeting a different market.

http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/for-china-an-oil-sands-investment-that-cant-be-blocked/article17446725/

http://www.albertaoilmagazine.com/2014/01/seekingthedragon-going-up/

COMM 296 Blog 2 Why did Lenovo buy Motorola

Cheap Versus Better

Price vs. Quality, a business decision that every company has to make. Do you go with Price and follow the paths of giants like McDonalds and Walmart or do you enjoy some high quality cuisine at a local restaurant and shop for your home necessities and specialized shops? Like Seth Godin mentions, there is market for cheaper and good enough alternatives, which I translate into a factor that paved the path for fast food giants like McDonalds (Godin, 2014). The number of customers for McDonalds in one store in one day would most likely be more than most higher quality restaurants in one week; maybe more than in one month. This “go cheaper” strategy worked very well for Walmart as they ran competitors down with their low low prices. Walmart is known for being cheaper than other retail stores and people go to Walmarts’ looking for a cheap deal. “Go cheaper” works for some, but not all the time. For example, would when you purchase a cheaper computer mouse and it stops working after a year, when a quality mouse that may cost twice the price but lasts twice as long and performs better (YNAB forum, 2012). In the long term, buying quality over inexpensive could save more money. Better quality products builds loyalty and grows the company. Customers that are happy with the product will mention this fact to people they know and your product just received free marketing by word of mouth. The Consistency Principle, created by Robert Cialdini, indicates that when a customer buys the product and enjoy it then those around them are more likely to purchase the product. If a company can develop a product to be of high enough quality that people will miss it if it’s gone, then the company has been successful by going better.

http://sethgodin.typepad.com/

http://forum.youneedabudget.com/discussion/15084/buying-cheap-vs-buying-quality