Chris Sorensen posted in Maclean’s Business Blog last Thursday about Sunquest, a Canadian vacation planning company that is focusing its efforts on flights in the United States.

Sorensen explains that on average, flight in the U.S. are about 30% cheaper than in Canada, resulting in about five million Canadians traveling to across the border for a cheaper flight each year. These costs are attributed to much higher than average rental fees and taxes on jet fuel.

Sunquest has begun a new strategy to offer flights for Canadians from border cities such as Bellingham, WA and Bufffalo, NY to save customers money. Their packages are estimated to save more than $500 in flight costs.

As long as the high costs of Canadian airports continues (as it is likely to), then so will the practise of Canadians flocking south to catch flights in the United States. Sunquest hopes to capitalize on this mass exodus of Canucks, serving its own interests while also protecting Canadians at home.

In response to Nicola’s post titled ‘Identity Theft’, I would like to offer another point of view.

The Toronto Sun article she analysed detailed the lawsuit between coffee giant Starbucks and Black Bear Micro Roastery over the use of “Charbucks” to describe blends of the small business’s coffee. Starbucks lost their lawsuit against Black Bear over alleged copyright infringement.

While Nicola argues that this is example of stealing Starbuck’s brand name and that the court acted wrongly, I have another understanding.

Intellectual property is the exclusive rights to ideas and creations from the mind. However, can we always claim that our ideas are entirely our own? For example, if I create a new type of alpine skis, didn’t I borrow from the pre-existing concept of skis?

Starbucks claims that Black Bear stole their ideas and violated their intellectual property rights. However, they neglect on where their own name came from. ‘Starbucks’ refers to the first-mate on the Pequod, the ship, in the novel Moby-Dick. If Starbucks can try to destroy a small coffee company that has ‘destroyed its image’, why can’t the family of Moby-Dick author Herman Melville be able to sue for intellectual rights over the Starbucks name?

In response to Scott’s post on the introduction of a Bitcoin ATM in Vancouver. I respectfully disagree with his position because I believe that Bitcoins have the potential to revolutionize currency.

Like the Canadian dollar, Bitcoins are a type of fiat money. Unlike representative money (money backed by hard currency such as gold), fiat currencies are an artificial construction. The difference between Bitcoins and traditional currencies are its lack of central control. While Scott sees this as a drawback, I see it as advantageous.

Lack of central authority means that rather than having a banks control the money supply, authority rests in the hand of the digital currency’s users. Power is not limited to a single group such as the Fed, which can control the money supply at its convenience. Decentralized systems are much harder to manipulate. Additionally, they are harder to monitor, guaranteeing more privacy for consumers than Visa or Mastcard, which monitor consumer spending habits.

While Scott argues that PayPal already covers online purchases, Bitcoins take the middleman out of the equation. Last year, PayPal is had $5.6 billion in revenues and consumers pay for their services on every purchase, which would not apply to the use of Bitcoins online. The decentralized nature of Bitcoins is better overall for the anonymity and savings of consumers.

Businesses often lobby government officials in order for favourable policies to be implemented, typically to help them become more profitable.

In the U.S., two of the largest airliners: American Airlines and U.S. Airways have planned a merger to combine their companies as one. If the two airline giants end up merging, they will form the largest airline in the world. However, anti-trust laws question the legality of such proposals.

Anti-trust laws are designed to keep the market competitive. They break up businesses that are large enough to hurt the competitiveness of the market, especially those that become monopolistic. The fear of this merger is that the consolidation of the airline industry will result in higher prices and worse service, ultimately hurting consumers.

U.S. Airways and American Airline have launched a PR campaign to support their decision and have controversially petitioned many members of the U.S. congress to support the merger. Many believe that the Justice Department is giving in to the demands of big business.

Milton Friedman famously claimed that “The Social Responsibility of Business Is to Increase its Profits”, but why should a business deserve to take more from the consumer without providing better service?

http://www.nytimes.com/2013/11/16/business/baffling-about-face-in-american-us-airways-merger.html?pagewanted=2&_r=0

http://thepointsguy.com/wp-content/uploads/2013/06/aa-us-airways-merger-tails-021413.jpg

http://assets4.bigthink.com/system/idea_thumbnails/51632/headline/plane_crash.jpg?1373396922

A common problem for start-up companies to become successful is their lack of available capital to create and develop their business. Often, they have trouble finding investors or acquiring loans because of the risks involved in starting a business from scratch. In the developing world, these problems are greatly magnified, especially for tech companies. However, despite the odds, tech companies have formed in the most unlikely of places.

In Africa, only about a sixth of the population have access to the internet. Additionally, loan interest rates by banks can be as high as 28% according to the Globe and Mail. These hurdles didn’t stop Abasiama Idaresit forming Wild Fusions, now worth $20 million and growing.

In the developed world, start-ups have significant advantages in funding, available technology, and human capital, resulting from the abundance of investment firms, more access to higher education, and existing infrastructure such as access to the internet.

As Africa becomes more developed, we will see more businesses start up and more overall prosperity, like many emerging Asian and Latin American markets have seen, and tech start-ups such as Wild Fusions will be among the companies driving this development.

http://www.theglobeandmail.com/report-on-business/international-business/african-and-mideast-business/african-tech-startups-held-back-by-lower-internet-penetration-scarcity-of-early-stage-capital/article15424220/

http://www.internetworldstats.com/stats1.htm

This week, the Internet Corporation for Assigned Names and Numbers granted the city of London their own internet domain name. Starting in 2014, ‘.london’ will be used to differentiate London businesses and organizations from the United Kingdom’s ‘.co.uk’ domain. London will become one of the first cities to adopt its own internet domain name and it hopes to use this to its advantage. The addition of this new domain name acts as a way of expanding “London’s global brand” and helping the city’s industries associate themselves with the iconic metropolis.

As the internet becomes more important, it will continue to develop as a commercial tool for businesses. The city of London already has established itself as a strong brand through its identity as a commercial center for corporations and consumers, and will further this image by creating a strong internet presence. This point of difference will give London a significant advantage over other cities without such associations.

http://www.theglobeandmail.com/report-on-business/international-business/european-business/dot-london-city-launches-own-domain-to-boost-online-presence/article15465026/

http://s3.uicdn.net/bc6/fe2cf9a89e53a06b40fd8c8cf326e/oneandone_uk/london-domain.png

An article I read in the Globe and Mail ties directly with many of the topics we have discussed in class. “BlackBerry hit with securities shareholder class action” is about exactly what the title suggests. Blackberry is being sued by one of its shareholders for allegedly “inflating” stock prices by making its financial situation seem to look better than it was in reality.

Last class, we discusses financial statements and fraudulent financial reporting, where members of a business tweak the numbers when reports assets or liabilities usually in order to make the company look better in the eyes of the public, and therefore, raise its perceived value. Although there is no evidence of fraud in their finances, they are in hot water for mislead potential stockholders, still however, a potential violation of the ‘Securites and Exchange Act of 1934’ according to shareholders.

Last year, when the BlackBerry 10 line was being showcased, many people who bought stocks felt that they were being misled after BlackBerry 10 flopped in its release. Since then, BlackBerry has been struggling to remain competitive, has reduced its workforce considerably, and its share price has dropped a great deal.

Whether or not BlackBerry is guilty of misleading shareholders, the company is still in big financial trouble and will have to go great lengths if it is to remain competitive in the market.

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

http://cdn-static.cnet.co.uk/i/c/blg/cat/mobiles/blackberry-broken.jpg

Twitter is going to go public soon and has just filed for IPO, or Initial Public Offering, to be traded on the market after approval by the Securities and Exchange Commission. They are expected to fare well in the stock market once they are listed. They will join the stock exchange after a three-week period where a starting price will be set for shares. Even though they aren’t listed at the moment, they have already received a “buy” rating by a brokerage firm which claims that the stock price could reach $50 from “float[ing] at $28 – $30”.

Although the anticipation for Twitter going public is high, rival social media giant Facebook Inc., which went public last year, flopped in its initial public listing contrary to expectations. Some concerns for Twitter are that they reported massive losses in the last few years because of internal problems and not commercializing very fast. However, Twitter believes that advertising revenue will continue to go up.

One can only speculate how Twitter will fare when going public. They have been losing money and have a great deal of liabilities from the past few years, but their cash flow is increasing with increased and more specialized advertising. However, unless they stabilize their balance sheet, potential stakeholders may be weary to invest.

http://www.theglobeandmail.com/report-on-business/international-business/us-business/twitter-gets-buy-rating-even-before-listing/article14722911/

http://www.wired.com/business/2013/10/twitter-files-for-ipo-2/

http://www.digitaltrends.com/wp-content/uploads/2012/03/twitter.jpg

The Economist’s “Un-marketing rhino horn” is an article that I read which struck me as interesting and relatable to some of the topics which were discussed in class. The article outlined the “lucrative black market” for rhino horn that is becoming more and more aggressive with poaching throughout South Africa and other areas where rhinos can still be found. Although a ban on rhino horn trade has been instituted internationally, there is such intense demand for it as a luxury product in countries like Vietnam that the illicit trade continues anyway. Efforts are underway to help reduce demand for rhino horn in the form of marketing campaigns and removal from pharmaceuticals (in many cultures rhino horn is wrongly thought to improve health and was until recently used in many medicines). Public awareness campaigns about extinction of the rhino, actual health benefit (little if any) of the horn from medical professionals, and concerns over danger of the product (illegality, funding terrorism, poison implanted in rhino horn, etc) are all being considered in order to help protect the rhinos from being poached into extinction.

This relates to the marketing aspect of our class. As we learned, brand image and public perception of a product is vital to its continued sales and future existence as a brand. In the case of the rhino, proper “de-marketing” can be used to destroy the rhino horn “brand” and help save the critically endangered species from extinction.

http://www.economist.com/blogs/schumpeter/2013/10/business-conservation

For our immersion into business ethics I read “Counting the Cost of Fixing the Future”, a New York Times article by Eduardo Porter that detailed the social costs of global climate change on the world economy. Porter introduces the article with a study from the Obama administration that provides “new estimates of the social cost of carbon [emissions]”, compiled from predicted increases in property damage from natural disasters, rising sea levels, increased disease, and the losses in overall productivity in GDP. The cost of a ton of carbon dioxide is estimated by the US government at $65, or about 56 cents per gallon of gasoline; however, other estimates range from $13.50 to $139.56 per ton of CO2.

This article relates to business ethics because it offers choices for governments and businesses to make a differences for the future. In an ideal world, Porter suggests, would be to greatly curtail carbon emissions at any cost. This, however, presents many problems for businesses as it would greatly raise costs of operations and force costly (or at least inconvenient) alternative sources of energy. A less taxing, but nonetheless ethical option could be to pass a law taxing fossil fuels at their estimated social cost and using revenues to help curb the effects of global warming. Unfortunately, business leaders are reluctant to do this, as they don’t see an adequate return on the investment.

In this situation, I believe doing nothing would be unethical from a social standpoint. A compromise for a carbon tax would be an ethical response to this issue that would not be too taxing on businesses; providing equity without sacrificing efficiency.