Often, you will overhear a group of Sauder students discussing their future partnership plans together.  Whether it’s starting up a clothing company, or a phone application, the idea will always be circulating around the room.

However, after visiting Michael Fertik’s blog, I was intrigued by his opinion regarding a start up businesses and university friends.  In his opinion, co-founding a company with your business school friends is a very big mistake. He claims that until you start a business with your peers, you are unaware of their work habits and values, and as a result students should avoid starting up a business with their peers at all costs. Although there may be some truth behind his reasoning’s, past history has demonstrated that co-founded corporations can be successful; therefore, I disagree with his argument.

Given the success of Cathy Han’s company, 42, and the success of Eugene Dong’s company, Procurify, it has been proven that student co-founded company’s can be successful.  As said in COMM101, anyone or group of people with a great start up idea can become a successful entrepreneur; therefore, students should not be discouraged when it comes to starting a business with their peers.

References:

http://blogs.hbr.org/2013/11/dont-start-a-company-with-your-business-school-pals/

Given Abercrombie and Fitch’s reputation after the CEO, Mike Jeffries, made an obscene comment regarding some of their customers, you would think Chip Wilson, the founder of Lululemon, would learn from Jeffries mistakes. Lululemon is known for creating high quality athletic garments; however, after a recent interview regarding the company’s recall on their “see through pants”, Wilson has damaged the company’s relationship with some of their customers.  Wilson damaged the company’s image by suggesting that their pants are not made for woman of all body types.

When considering a SWOT analysis for the company, it has become apparent that the issue regarding Wilson’s comments has become an internal weakness for the company.  Although there is no bylaw stating that a clothing company is required to produce products that will fit all body types, Wilson’s comment has negatively affected the company’s brand name.  Because of his comment, people are now associating the brand as being an unaccepting company against heavier set woman; therefore, this may result in a decrease of sales.

Because Wilson has tattered the company’s brand image, I am looking forward to learning how he is going to regain the strong relationship his company and customers once had.

References:

http://www.cbc.ca/news/business/lululemon-founder-chip-wilson-says-pants-don-t-work-for-some-bodies-1.2417980

http://www.huffingtonpost.com/2013/05/16/abercrombie-reputation-ceo-comments_n_3288836.html

Based on the success rate of Facebook’s initial public offering, IPO, many presumed Twitter’s IPO would also fail; however, they were proven wrong. Twitter, also known as TWTR on the New York Stock Exchange, initially offered their shares at $26. It shot up to $50.09, and closed at $44.90, thus the price of the shares had a 72% increase within a day. In COMM101, we discussed the various factors that would result in a good IPO, such as the economy, the time of the year, and the exchange, of which was proven during the success of Twitter’s IPO.

The time of a company’s IPO is a very important factor. Luckily for Twitter, November is known for being one of the best months for market gains in a year, and the stock market during the time was at an all time high of 25%. The exchange is also a very important factor. During the sales of Twitters stocks, not only did the New York Stock Exchange “get the stock open, [but it also had it] trading in under 90 minutes”.

There are numerous factors that affect the success of an IPO, of which many private companies should consider when going public, of which contributed to Twitters opening success.

References:

http://www.economist.com/blogs/schumpeter/2013/10/twitters-ipo

http://finance.yahoo.com/blogs/breakout/4-reasons-twitter-ipo-rocked-where-facebook-rolled-192651553.html

Every Monday, my favourite Youtube artist, Connor Franta, will post a video on his channel. Admittedly, because his videos are very entertaining, I look forward to his new video postings each week.  Recently, Youtube incorporated 30-second ads between videos. With this change, I am beginning to lose interest in watching videos.  I find it irritating that I have to wait through the ads, and in addition, I find that the videos load slower.

After visiting Safira Nabila’s blog, I was fascinated by her post on the possibility of Instagram joining the advertising train.   In her opinion, Instagram is an inelastic product; therefore, they will not lose their customers after the addition of ads.  Despite there may be some truth to this statement, given my annoyance with Youtube, I anticipate a decline in users for the application; therefore, Instagram should use this as an opportunity to create an ad free app.

The development of this application will allow their customers to purchase an ad free application or, continue to use the free app with the incorporation of ads.  Having this option available to me, allows myself and other users to continue using the application in an ad free environment.

As said in COMM101, anyone with a great start up idea can become a successful entrepreneur.  However, due to the numerous complications that are directly related to the start of a business, an entrepreneur should also take into consideration various strategies to overcome these issues in the future.  Eugene Dong, the co-founder and CTO of Procurify, is an excellent example of a young entrepreneur from Vancouver who carried out his dream, and has become very successful.

In 2011, Dong and his colleagues realized the annoyance of using an “outdated paper process to make reports, requisitions, approvals, and purchase orders”; therefore, they saw the potential in starting an online management program that would allow businessmen to control their company’s spending online.

The success of the business has been a result of their willingness to pursue their dreams, even though it involved a lot of risks. Not only did they see how their business would assist people’s needs at the time, but they also considered how the company would assist people in the future.

Given Dong’s situation, it is apparent that anyone can become an entrepreneur, as long as they have a dream and are willing to carry out their plan.

References:

http://www.procurify.com/

http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/day-to-day/in-pictures-introducing-vancouvers-most-promising-young-entrepreneurs/article14104025/

         Marvin Pearlstein, a BlackBerry Ltd. shareholder, sued the company after it announced losses of over $930 million with a write down due to unsold BlackBerry 10’s.  Pearlstein accused the company of inflating stock prices and misleading investors into believing that the new smartphone line was going to be successful.  BlackBerry’s share value dropped 24%, from $10.52 to $8.01within 5 days of the announcement of the write down.

Pearlstein does not have the right to accuse BlackBerry for misleading investors.  In September 2012, BlackBerry was in a very strong financial position as their past products had been very successful; however, due to popularity of competing brands, such as Samsung and Apple, BlackBerry’s sales dropped.  BlackBerry did not intend to create an unsuccessful line.  Prior to investing, the investor should be aware of the numerous amounts of risks that are related to making an investment into a company.  According to the article, people invest in hopes of generating more money; however, there are always risks.  When making an investment, there is never a guarantee that the investor will receive a return.  Investments into companies are made based on speculation; therefore, the investor should accept the fact that he made a bad investment.

http://www.cbc.ca/news/business/blackberry-hit-with-shareholder-lawsuit-1.1913852

http://www.theglobeandmail.com/report-on-business/blackberry-hit-with-securities-shareholder-class-action/article14713440/

https://www.youtube.com/watch?v=nUsRChAmtQ0

https://www.youtube.com/watch?v=FsuzZitg83c

           Over the past twenty years, Olympus, has been falsifying financial statements. The cover up of their financial losses was exposed in 2011, when Olympus’s newly hired Chief Executive, Michael Woodford, questioned the company’s accounting transactions. On September 18, 2013, Olympus’s accountant, Chan Ming Fon, admitted to providing false information to the auditor regarding the company’s financial investment portfolios.

A company’s failure to provide truthful statements regarding a company’s financial status is recognized as fraud.  As reference to the readings, financial statement fraud is a serious issue. Over the last six years, Chan has been liquidating Olympus’s assets “to repay an undisclosed loan”.  Chan’s motive for providing misleading information was to hide the company’s huge financial loses from investors.  Before an investment is made, an investor looks at the company’s balance sheet. Investors will sell their shares and no longer invest if the company is in debt. Because Chan provided false information to hide the company’s losses, the auditor overrated the company’s net worth.  Despite the fact Olympus was successful in 2010 and 2011, the recent exposure of the cover up may cause the complete decline of the company, as the company may be removed from the Tokyo stock exchange.  

Crook, Jordan. “Down From Olympus: What’s Going On At The Beleaguered Camera Company?” TechCrunch RSS. N.p., 7 Dec. 2011. Web. 07 Oct. 2013.

Vaughan, Bernard. “Olympus Accounting Fraud.” Reuters. Thomson Reuters, 18 Sept. 2013. Web. 07 Oct. 2013.

In contradiction to Justin, Xiaomi has the potential to be a successful competitor outside of Asia.  Within the past year, Xiaomi sold over 7.2 million phones in Asia; this is equal to 5.7% of the iPhones sold globally.  The phone’s price is 50% less than the iPhone, making it very desirable.  Its great success in Asia demonstrates its ability to compete globally against companies such as Samsung and Apple.

Justin argues that Xiaomi cannot succeed in the Western and European market because it originated in Asia, it is not globally known, and it is too costly to distribute.  This argument can be contradicted as Samsung, which is now a global company, also originated from Asia.  Xiaomi is a young company and has not branched out beyond Asia; hence it is not a globally known and the fact that the Mi-3 can be sold for 43% of the iPhone will allow it some room to increase the price to allow for distribution costs.

Overall, Xiaomi is a very popular, young, rapid growing company that manufactures a product similar to the iPhone.   It currently only sells it products in Asia, however given it’s rapid growth and success; it can also be a successful competitor in the Global market.

https://www.youtube.com/watch?v=3v5sPFw2NPE

(2013, September 14). Taking a bite out of the Apple. The Economist. http://www.economist.com/news/business/21586344-xiaomi-often-described-chinas-answer-apple-actually-quite-different-taking-bite-out

As previously stated by Joseph, BlackBerry was once a leading corporation in the technological market. However, the products created by their competing companies, such as Apple and Androids, resulted in BlackBerry losing their market share.  Trout and Ries, indicates how “challenge[ing] the [leading company in the market] head on” (Trout and Ries) is a mistake; therefore, in order for BlackBerry to regain its position, Fairfax must change the company’s focus back to corporations and businesses. In the past, BlackBerry only specialized in products for corporations; thus they became very successful.  Subsequently competing companies entered the market and began targeting the workers in these businesses. The workers in these businesses began to use these products over BlackBerry; hence, BlackBerry began to chase after the consumer market. BlackBerry’s focus on consumers resulted in losing the interest of their previous customers, corporations, because they began to release products that would be of more use to consumers than businesses. In order for BlackBerry to regain its position, the company must recreate similar products that made them leaders in the past; therefore, they need to develop products that will target corporations, because they were the group who made Blackberry leaders.

https://www.youtube.com/watch?v=c2iP4Jq28UQ

Bibliography:

Ries, Al, and Jack Trout. “Product Positioning.” Product Positioning. N.p., n.d. Web. 29 Sept. 2013. <http://www.quickmba.com/marketing/ries-trout/positioning/>.

“Still in a Jam.” Still in a Jam. The Economist, 28 Sept. 2013. Web. 29 Sept. 2013. <http://www.economist.com/news/business/21586869-going-private-will-not-solve-companys-problems-still-jam>.