Jamie Grassby's Blog

The North American shopping season has started on a very high note. American figures suggest that sales in the “first week of the shopping season” reached 45 Billion USD.  An analyst of the Wall Street Journal suggests that this year, “Shoppers aren’t just out looking for bargains, they’re buying impulse items.” An Financial Post article http://www.financialpost.com/news/investing/Cyber+Monday+sales/3901863/story.html, claims that the average consumer is spending 6% more than last year. This is great news for the corporations, and it also may reflect positively on the economy. More money is being put back into the market, and the economy is being stimulated. This trend suggests that as an economy, Canada and USA are slowly pulling away from this recession. But it isn’t just the retailers that are benefiting from these impulse buys, the online stores and retailers have seen huge improvements in sales. This same article explains that this weekend’s online sale reached $1 Billion compared to $900 million from the previous year. This comes as no real surprise considering the rising popularity of online shopping, and considering our economic growth from last year. As the shopping season begins, we will see sales figures rise significantly from years passed. This same analysts claims that, “While things are still not great, they are a lot less worse.”

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Casinos make their appeal by focusing on enticing the public and creating an atmosphere of fun and games, but the reality is, Casino’s are in it for the profit. Casino’s are an extremely profitable business that relies on the gambler’s incentive to win. For some that is the case and they do end up winning, but for most, losing money is usually the outcome. Las Vegas, known to most as “Sin City” and “The biggest gambling spot on earth”, represents the epi-centre of gambling. The music, the drinks, the lights, the money, and the thrill of it, get the people in the casino doors. But these are mere distractions until these people realize their pockets are soon empty.

A casino generates different profits depending on many different variables. For example, a Las Vegas strip casino will likely make a lot more money than a rural Canadian casino, but the Vegas casino will have much higher costs of running the place. Different casinos have different consumer targets. If casinos are successful at meeting the wants and needs of their target gamblers, then the casino will earn the desired profit.

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As November approaches, it is not only the cold and rain that comes, November also represents International Breast Cancer Week. This past week in Rio de Janeiro, Brazil, the statue of Christ the Redeemer is lit up bright in pink, a week before the month begins. This statue represents only one of forty different monuments that will support the cause by being “pink” this upcoming week. This is incredible news for the fight against Breast cancer. This incredibly advertised campaign will reach millions, and gives us an example of how important and powerful marketing can be. It had me thinking of different examples that best exemplifies the effects of marketing. Marketing is a process where companies create consumer interest for their products or services. One famous example of very effective marketing and advertising occurs each year during the SuperBowl. Almost 100 million people in North America are subject to several different TV advertisements. These commercials are so effective because of the sheer number of people these commercials broadcast too. Like the monument in Brazil, these commercials are supposed to cater to the biggest possible amount of the public, especially their respective target audience.

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The Canadian housing Markey is back on track, sort of.  Remax Canada put out a report claiming that the Markey has “vastly improved”, but still believes that sales will be down for the rest of the year, http://www.bnn.ca/News/2010/10/5/Housing-market-makes-strides.aspx . Some may disagree with the statement released, especially after a terrible summer. For example Vancouver has seen a drop of more than 37% from last September.  Ironically, finance minister, Jim Flaherty, on Monday warned the country of it’s struggling economy, singling out the housing market for being one of the key contributors to this recession.  Although Remax tends to disagree, explaining that of the 19 different markets that they were following in the past year, all of them showed improvements in numbers. So whom should we believe? At this juncture in time, it would be tough to evaluate any change in the market as winter approaches. Typically, winter is the worst season for real estate, and generally maintains the lowest numbers of all the seasons, here in Canada. A good determinant of how the market is going would be to measure sales during the spring and summer seasons to see how the market is in peak season.

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The social-networking icon has recently been going through many internal changes. Twitter’s CEO, who’s been Evan Williams for the past two years, has recently stepped down, http://www.bbc.co.uk/news/business-11473020. He has been replaced by the current chief operating officer of Twitter, Dick Costolo. Mr. Williams attributes stepping-down to finding more time to research and figure out ways to improve company efficiency and productivity. His intent, according to his own twitter page was to, “meet its potential as a profitable company.” This is a significant and important corporate change, and will effect more than twitter’s 160 million users, including all students in Comm 101. People will ask, how much will Twitter change? Very little. Since Twitter has decided to change CEO’s within the company, the business will go in the same direction as it was when Evan Williams ran things. Furthermore, Mr. Williams is staying around to advise Mr. Costolo, in addition to his position on the board. This is the third different CEO in three years, which raises a few concerns. This is not the case for Twitter, who’s rapid growth allows the company to bring in expertise for such growth.

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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.

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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.

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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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