Month: September 2010

The Chinese government has agreed upon a new import tax on American chicken imports. The new tax implemented this month, has been a cause for concern for many American food companies. The article, http://www.bbc.co.uk/news/business-11415036, explains that American chicken exporters are faced with duties up to 105.4 % for the next five years. This is a significant raise from the 43.1% these companies were faced with before. Historically, lower and middle class Chinese citizens could not afford foods like chicken and various other meats. But as China grows economically and as the Chinese minimum wage has grown significantly, the Chinese people have more money to spend on food. Therefore, chicken has become a very hot commodity in China. The Chinese government is encouraging the domestic production of the animal, in hopes to stimulate it’s own chicken market. This import tax will significantly affect many American companies that were reaping the rewards off the newfound popularity and demand for chicken in China. Many companies such as; Tyson Foods, Keystone Foods, and Pilgrim’s Pride Corporation will have to look at other ways to make up for these new taxes.

RIM, a Canadian-based research company, made a deal with India to keep RIM’s Blackberry service in India. This is a giant move for the company who’s headquarters are located in Waterloo. The deal according to this report, http://www.cbc.ca/money/story/2010/09/24/rim-blackberry-india-deal.html explains that government officials, and police are allowed to monitor phone calls, and intercept messages from any form of communication. These arrangements are very similar to those set up here in Canada. For RIM, maintaining a good relationship with India, is beneficial. India, who is the second most populated country in the world, maintains over 600 million different land or cell phone users, and this number is sure to grow in the future. India is considered the world’s fastest growing telecommunications industry, and has the second largest telecommunication network outside of China. Therefore, becoming a mainstay in the Indian market, RIM is sure to succeed. Blackberry has been a huge success in the North-American market, but not as successful in the international market. This is largely due to the competition Blackberry faces in foreign countries.  For Blackberry to succeed they’ll have to attract new cell phone users, and try to entice those who already have cell phones to switch to them.

After our second class, I was intrigued with Toyota’s corporate structure. In class we discussed some of the key problems that the Big Three auto companies faced, that Toyota and the other relatively new auto brands in the United States weren’t faced with. For example, from the articles read in class, the Big Three was dealing with astronomically high healthcare costs, not only for their workers, but especially for their retirees. This isn’t a fiscal issue that worries Toyota too much, at least, not right now, considering Toyota in the United States is a fairly new corporation without many retirees. But recently, Toyota has encountered many problems on their own. Toyota has been dealing with tons of recalls on their cars in 2010. This report indicates that around 200 000 cars need to be recalled in Canada alone, http://www.cbc.ca/consumer/story/2010/08/26/con-toyota-recall.html. Now we find Toyota in damage control. There have been several lawsuits from angry customers demanding some sort of compensation. Toyota chairman Akio Toyoda, visited Congress, to receive some mercy against all these claims made, http://www.cbc.ca/money/story/2010/09/15/toyota-lawsuits.html. At this point, I believe all lawsuits should be dropped, but Toyota should compensate their customers in some sort of fashion.

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