Service is defined as taking action to create value for someone else; this is exactly what Zappos has done for their employees. By creating a set of core values for his company, Tony Hsieh has successfully established an employee base that provides excellence customer service. Zappos’s selective recruitment process  separates the people who are there for the right reasons and people who are there only to make money; this is shown through the fact that some people take the $2000 to quit after the first week. This set of core values allows all employees in the company to have common goals which in turn creates efficiency. Generally, employees in other companies have their own personal values and systems to live by which is inefficient and generates conflicting interests within the company. This holds true especially for company takeovers; when IBM took over lotus, it drove it into the ground since Lotus’s innovative structure wasn’t compatible with IBM’s rigid structure. “When company A takes over B, company B cannot assume the structure of A”. Managing employee performance is very difficult since “everybody’s different” and it’s hard to predict the behavior of people.

http://www.theglobeandmail.com/report-on-business/small-business/sb-managing/human-resources/7-can-we-be-like-zapposcom-if-the-shoe-fits/article1380588/

In last Thursday’s class, a speaker talked about the size of the carbon footprint that Canada leaves on the world. What really surprised me was that most carbon emissions came from food; then it was explained that the reason why is because it included factors such as transportation and manufacturing. It makes sense why transportation is the biggest contributor of carbon emissions. In a province where most electricity is provided through the means of a hydro-electric source, transportation is still primitive and inefficient; it is impossible to get anywhere without burning a significant amount of fossil fuels. The speaker noted how more than 4/5 of his annual carbon emissions were plane-related. Although it’s better than burning coal, burning fossil fuels still has a significant impact on the ozone layer. This class made me think about how business might be conducted in the future. In the future, what will happen to businesses that are heavily reliant on transportation? An electric car is shown to have a higher amount of total carbon emissions during its production stage (When you buy one, it already comes with a cost to the environment). So what can businesses do to be more sensitive to the environment?

 http://www.theglobeandmail.com/life/health-and-fitness/health/what-your-food-is-trying-to-tell-you/article4705510/

In last Thursday’s class, the topic of angel investors sprung up. As a potential entrepreneur in the future, I was very interested in this topic; she talked about how she was able to convince an angel investor to loan her $800,000. What really intrigued me was how she manged to convince the investor to loan her this huge sum. She explained how it wasn’t mainly the business plan that effected the outcome, but the way she presented herself to him. I did further research on the topic of angel investors and managed to discover important key points to go about finding one. In an interview with an angel investor, many key questions were asked; the interview showed that the investor was only interested in beautiful and well-designed products. He explained how even horrible logos or badly-named products could be the deciding factor in investment. He is looking for people who are passionate, knowledgeable, and who possess the the skills to execute their plans. It is also important to note which angel investor to pick by looking at past history; you’re going to see them a lot.

http://www.theglobeandmail.com/report-on-business/small-business/sb-money/business-funding/inside-tips-from-an-angel-investor/article600101/

What is needed to help people? The answer is money. Although fundraising is a decent method in generating revenue, ultimately, it isn’t the most efficient way. This is where social entrepreneurship comes in. By having capitalistic incentives, not-for-profit companies are able to provide social benefits for the community while generating a sustainable amount of revenue. This article explains the experience of Jordan Kassalow, an optometrist that had a revelation after he outfitted a boy with glasses. With half the world needing glasses, there is a great need for the distribution of this good. In a test, Kassalow used the basics of capitalism in the distribution of glasses; he used the profit motive in order to encourage the women in these developing nations to sell these glasses. In the test, a third of the women broke even, a third lost money, and a third made money. Although half the world needs glasses, this test shows why there aren’t many social entrepreneurs helping the people who need glasses; this market is not self-sustaining and it requires major investments from philanthropists. It really is a shame; Without glasses, many people can’t function to their maximum capacity and this creates an economic drain.

http://www.theglobeandmail.com/report-on-business/small-business/sb-money/business-funding/for-social-entrepreneurs-fundraising-isnt-the-only-means-to-money/article4624378/

What exactly have the baby boomers left us with? A bunch of debt. As baby boomers reach retirement, they’re able to enjoy pensions, health-care benefits, and old-age benefits while the workforce diminishes at a rapid rate. Since the 1950’s there has been a steady decline in Canada’s birth rate; coupled with the fact that there aren’t enough immigrants arriving, it is estimated that the ratio of working Canadian’s to retirees, will fall. What does this mean for young workers? It means we are in charge of clearing the debt they left behind- meaning we have to pay more taxes, and that there’s less of us to take on the burden. It is estimated that Canada will have a debt of 1.5 trillion dollars over the next 5 decades and that younger workers will have to work longer before retiring. Young workers now are at a disadvantage compared to the young workers 50-60 years ago. Boomers had the “best bang for their buck” in terms of education, and they’re able to sell their long-term assets to fund their retirement. With increased tuition costs, increased national debt, and a whole lot of old people to take care of, the future seems hard for many young workers.

Sources:

http://www.economist.com/node/21563725?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

http://www.arbitragemagazine.com/topics/international-affairs/canada/canada-handle-debt-baby-boomers-2020/

What attracts consumers? Expensive new Lululemon pants? Or is there something else that catches ones attention? The answer is cheap goods. Not everyone can afford expensive Lululemon pants, but everyone can afford items that are worth only a few dollars; that is why dollar store industries are one of the fastest growing retailers in Canada. The concept of goods only being a dollar attracts many customers. With a growing amount of customers, dollar stores are able to take risks; they started jacking up prices of goods to $2 or even up to $3. The success of dollar stores forces other major retailers such as Canadian Tire and Wal-mart to emulate their formula. Ultimately, they fail to do so because they aren’t as appealing as dollar stores (they don’t have dollar in their names!). Canadian Tire and Wal-Mart have started promoting their $1-3 goods in hopes of attracting consumers. When I go to Wal-mart, I always buy a 6 pack of Reese’s pieces because they’re only a dollar each! What these big retailers hope for is that consumers will be attracted by their $1 goods, but at the same time purchase more expensive products. With a combined 21,311 stores, dollar stores are closely becoming the largest chain in the U.S.

Sources:

http://www.theglobeandmail.com/globe-investor/how-canadas-retailers-discounted-the-rise-of-the-dollar-store/article4596897/

http://www.forbes.com/sites/investor/2012/04/16/dollar-stores-take-on-wal-mart-and-are-starting-to-win/

The increase in the price of health care in the United States has been astounding. In 1960, it was around 5% of the total GDP; now, it’s around 18% and predicted to be about 60% in 2105. What does this mean for the American consumer? Well, one first must understand the concept of cost disease. Let’s take a look at the economy’s average rate of growth. Some industries such as the car industry are able to cut costs because of new technology, therefore can afford to increase wages. Other industries such as the music industry, aren’t able to cut costs (A string quartet in the 18th century is as efficient as a string quartet in the 21st century); in order to compensate and keep up with wages, they are forced to increase the price of tickets. These type of industries are stagnant in terms of productivity, thus the term “cost disease” is given to them. Cost disease mainly applies to industries that require human interaction such as haircuts, health care, education, etc. Human input are the main costs in the industry and cutting labor would be counterproductive.

Since the 1980’s, the price of a university education has risen 440% while the price of medical care has risen 250%. The average prices of goods has increased by 110% while wages have increased by 150%. Although the price of health care is increasing at an alarming rate, it also means that consumers have more money to spend on other consumer goods (shown in the graph). Buying power is growing and innovation in industries are making many goods such as cars more affordable. This topic is relevant to what we have been learning in class. Many different sectors of the economy have to keep up with inflation in order to make it more efficient, and different sectors grow at different rates.

Sources:

http://www.economist.com/node/21563714

http://en.wikipedia.org/wiki/Baumol%27s_cost_disease