October 2014

Opportunity Costs: Tradition Versus Progress

The Nak’azdli First Nation’s opposition the Enbridge’s proposed Northern Gateway pipeline, as portrayed by Vancouver Sun writer Gordon Hoekstra in his article, There Will Be No Pipeline, initially seemed to be a wholesome and unselfish protest.

The Nak’azdli claim their reason for rejecting the pipeline is to simply  preserve their connection to the earth. However, the article highlighted how the sanctimony of their commitment is clearly flexible, as the majority of their community income is provided by fossil fuels and commercial interests.

My initial reaction after reading the article was split between condemning Enbridge for its infringement into First Nation territory and sneering at the hypocrisy of Nak’azdli values. However, I realized that the First Nations were trying to maximize their opportunity costs.

The traditional values of the Nak’azdli dictate preserving the land to assure livelihood for generations to come. Unfortunately, times have changed. Now, assuring livelihood for generations to come may very well involve giving up some of their land.

A well-run business would immediately try to predict the outcome – in this case, the inevitable progression of the pipeline – and find a way (perhaps using a SWOT diagram) to minimize threats and maximize opportunities. It would milk Enbridge for every penny, and make them bleed for every foot of sacred land. Perhaps this is exactly what the Nak’azdli are doing; frankly, if I was in their shoes, I certainly would. 

On that note, I will follow the developments of the Northern Gateway Pipeline with interest. The Nak’azdli will ultimately have to weigh their value propositions: what has a higher cost? Tradition? Or a brighter future?

Source:

http://www.vancouversun.com/news/There+will+pipeline/10122968/story.html?__federated=1

The Jeep: Unintentional Product Differentiation

A very well-researched article by Globe and Mail writer Peter Cheney attempts to explain why the Jeep, a marque that has refused to rely on product differentiation, still excels in today’s market. What particularly struck me is how he used the word “nostalgic” to describe the Jeep’s appeal. I found that to be very accurate, and wanted to explore the concept a little further.

To begin, I would like to point out that the Jeep is in no way practical. It has the aerodynamic efficiency of a fridge, the handling of a much larger and clumsier vehicle, interior amenities that would only impress my great-grandmother, and an engine output similar to a 20 year old mid-range Mercedes.

But…

I would, without shame, snap one up in a heartbeat. I very much intend to own a Jeep. Why? Because the Jeep possesses a value proposition that simply can’t fit cleanly into BCom lingo: it embodies an era. It has refused to innovate radically, and in doing so reminds consumers of a time where you needn’t fear using your car.

Furthermore, I respect what Jeep has done: it has remained true to the ethos behind its conception, when it was coined by a generation hell-bent on winning wars and driving a nation towards a brighter future. It is the automobile-embidoment of every lesson my grandfather has tried to teach me: it is honest, faithful, true, and incorruptible.

Jeep has differentiated without intending to. By refusing to waver from its identity, it has set itself apart from marques that have suffered drastic reincarnations and won over the hearts of the young and old alike. Now that is a brand value that automakers should aspire towards.

Source:

http://www.theglobeandmail.com/globe-drive/adventure/red-line/as-fads-come-and-go-this-is-why-jeep-has-survived/article20718846/