Jonathan Young's Blog

This year, more Canadians are turning towards the internet when it comes to their holiday shopping. According to this blog, three in four Canadians will be making online purchases this

season. With Canadian holiday retailsales expecting to increase by 3.5 percent from the previous year, most of it will be a result of online transactions.  It isn’t only limited to shopping, with “70 per cent of Canadians research products online before buying.” In addition, the increase in people owning smartphones is part of the reason towards this shift online.

But why? Through my experiences, I would assume that it is due to convenience. In this day and age, people have less and less time to go out, especially as your age and responsibilities increase. The turn online also helps people to find the best deals, making the most of their money. In class, we learned about channels in which businesses reach their consumers. It is easy to see that having a website/social media as a channel is becoming more effective. Having a website also adds to a business’ value propositions, allowing customers convenient access to products. Nowadays, if you don’t have a website, I guarantee it’ll be worth your investment.

http://ca.finance.yahoo.com/blogs/pay-day-/more-canadians-turn-online-holiday-shopping-165129938.html

In both my COMM 101 and 292 classes, increasing wages and other benefits were strategies to improve productivity and quality of work. This was a strategy in which I trusted as well as believed in as a way to make myself more productive. However when seeing Kenny’s blog regarding this, I was surprised to see that reducing wages could in fact also be used as a motivator in the workplace.

He references a Cornell article (www.ilr.cornell.edu/ICS/InsightsAndConvenings/upload/research-for-the-real-world-03-11.pdf), and goes on to describe how a “delayed payment” strategy could be effectively used. This model is essentially deflated wages at entry level positions and inflated wages at senior level positions. In actuality, this is not very different than current practices. While the wages are deflated early on, their inflation in the end makes up for said deflation.

From the view of an employee, I could see this as an effective motivator. However, this motivator would also have to entail loyalty towards a company, ensuring that they receive the lost wages in the long run. If you’re looking for a short time job, you may find better opportunities elsewhere.

https://blogs.ubc.ca/kennywu/2013/11/10/lowering-wages-as-motivation/

Snapchat has recently been all over the news regarding their rejection of $3 billion from Facebook to buy the company. While I have already written a blog regarding this, it is interesting to see the situation from another persons’ perspective. While I talked about why Facebook would offer $3 billion for a revenue-less company from a Finance/Marketing angle, Zoe came at the situation from a different angle.

Zoe Lin’s blog about Snapchat mainly refers to their value proposition which she describes as “[allowing] their users to send pictures to their friends in an easy and fun fashion.” She goes on to state that she believes Snapchat should have accepted the offer. While she thinks that they have a strong value proposition, she predicts that it will lose popularity in the long term as a result of her own experiences with the app. She brings up an interesting point that Snapchat is popular because it is new and currently a “fad”, however it is hard to tell when people will begin to move on to other new “fads”.

And I agree. While Snapchat is potentially worth $3 billion now, it is impossible to know what the market will be like in the future.

https://blogs.ubc.ca/zoeyichialin/2013/11/13/for-better-or-for-worse/

Why did Facebook offer $3 billion for Snapchat, a company with no revenue?

The answer is simple. “Facebook is no stranger to snapping up a threatening competitor, as it did with Instagram last spring.” Although Facebook holds a very strong position in the market for social media on computers, however the mobile social media market is growing and changing at a rapid pace. Apps such as Snapchat, WhatsApp, Kakao, etc. are beating out Facebook in those areas. In response, Facebook has tried to either buy out or create apps with similar purposes in order to beat out the competition unsuccessfully. While these apps are no serious threat to Facebook, there is a chance that social media may shift towards mobile phones.

The actions of Facebook is expected of any monopoly in a market. They use the market power they have to ensure their position on top. So while it may seem ridiculous to buy Snapchat for $3 billion, it is understandable that a company would attempt to get rid of competition, even if it’ll cost them $3 billion.

http://www.businessweek.com/articles/2013-11-13/snapchats-3-billion-rejection-and-the-great-facebook-unbundling

Creating shared value and introducing different forms of social responsibility is becoming more and more prevalent in present day corporations. Morgan Stanley is following suit by investing $1 billion towards the improvement of affordable housing in an effort to encourage aiding economic, social, and environmental sustainability. In addition, they are also pursuing $10 billion of client assets to fund investments providing social benefits as well as financial returns.

Not stopping there, Morgan Stanley has even gone as far as establishing a new Morgan Stanley Institute for Sustainable Investing. But Morgan Stanley is not the only bank investing in sustainable efforts. Other banks such as Goldman Sachs has also announced their investments in “social-impact” bonds funding early education.

Companies are constantly finding ways to enhance their own profitability while at the same time taking part in social responsibility.

James Gorman the CEO of Morgan Stanley puts those words into a foreseeable issue. “Our clients are increasingly turning their attention to what it takes to secure the lasting and safe supplies of food, energy, water and shelter necessary for sustainable prosperity.”

The realization that social responsibility can improve a company in all aspects is continuing to change companies around the world.

http://www.bloomberg.com/news/2013-11-01/morgan-stanley-pledges-1-billion-to-boost-sustainability.html

The battle between Android and iOS has been a fierce one. At first, it may appear that Android is doing well when compared to iOS. 81 percent of smartphones shipped in the third quarter of 2013 ran Android operating systems, an improvement of 74.9% in the past year. In contrast, iOS’ market share actually fell 1.5%.

This is a result of difference in prices. While the average price for a smartphone running Android was $268, the average price for an iPhone was $635; nearly a $400 difference.

Ramon Llamas, an IDC Research Manager stated, “If you go to emerging markets, it’s a price game… Devices like [Apple’s iPhone] and the new Blackberry – they’re very cost prohibitive.”

However, in terms of profitability, Apple is still doing well. An analogy that was used in the article that I read states that Apple is like Porsche while Samsung is like Volkswagen. While they have a dramatic difference in quantity sold, the price difference makes up for it. Apple’s specific audience and the brand position that they hold continue to provide them with loyal customers. Apple’s point of difference being providing higher quality phones and a stronger brand name, compared to Android manufacturers.

http://www.huffingtonpost.com/2013/11/12/google-android-apple_n_4260292.html?utm_hp_ref=canada-business&ir=Canada%20Business

Recently in the past year, the popular clothing brand Abercrombie & Fitch has gone under fire as a result of controversial statements made by CEO Mike Jeffries. Abercrombie & Fitch targets a specific target market of “cool” teenagers. The overlying problem is that while they target “cool” teens, they exclude the “uncool” and “unattractive” kids.

Jeffries is quoted saying, “Candidly, we go after the cool kids… A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.”

Why would a business such as Abercrombie & Fitch exclude such a large market with more than two-thirds of America’s population being obese? It’s very likely that sales may decrease as a result of this bad publicity, A&F being seen as a very controversial and exclusive brand. However, at the same time, they are able to effectively create a stronger brand identity. No brand can effectively target an entire market. By targeting a specific demographic and making statements like A&F, while they are excluding a large portion of the market, it is an audience they are not trying to reach while at the same time making those who do fall within that category more loyal.

http://www.forbes.com/sites/rogerdooley/2013/05/16/abercrombie-ceo/

Amazon’s new Kindle Fire HDX colour tablets have a unique feature when reviewed with comparable products in the field, they have a 24 hour technical support that can be assessed from your Kindle, allowing the consumer to see and talk to tech support within 15 seconds. While many people don’t see the value of having a Kindle, due to its limited usage variety, Amazon understands that customers of the Kindle care more about the content than the device itself. With the new feature, consumers have the ability to chat with and even get technicians to resolve any problems they have with their Kindle. As well, Amazon has continued by slashing prices down to $139 and $229 for the small and large Fires respectively. They have also become thinner and lighter.

Amazon’s understanding of their customers’ values, needs, and wants, is very effective for them in the long run. They understand that their consumers have very specific tasks and instead of developing new features, they spend time improving the ones that count. Their use of the face to face tech support also shows their understanding of the importance of customer service. Through this, Amazon continues to innovate and improve their products.

http://www.bloomberg.com/news/2013-10-02/new-kindles-add-help-with-a-human-face-rich-jaroslovsky.html

http://internet-safety.yoursphere.com/wp-content/uploads/2012/12/Kindle-Fire-HD-8.jpg

Twitter is one of the biggest social networking sites in the world, however in comparison to Facebook, it is lacking from the international side of things. Three quarters of it’s users reside outside of the United States generating $53 million in revenue, equal to 17% of its total revenue. Meanwhile, Facebook has had half of its revenue from international sources. Twitter is aware of this issue and has many plans to globalize and reap more revenue from outside of the Untied States. Such plans include adding more languages, advertising products in more countries, and opening up additional offices in different countries. While Twitter implements these strategies, it is known that Twitter is a relatively young company. However, companies such as Google were already ahead in terms of international revenues.

After learning about business plans and the importance of globalization, it can be seen that Twitter needs to continue to focus on international revenue. With only one quarter of users in the US producing 83% of its revenue, they are not reaping the profits that could be made outside of the states. With better management and operations, Twitter will soon increase revenue as well as increase the value of the company.

http://www.bloomberg.com/news/2013-10-03/twitter-may-be-global-but-most-of-its-revenue-isn-t.html

A big part of ethics in companies nowadays has to do with the environment and sustainability. Many companies may choose to take short-cuts which often harms the environment. At the same time there are many rules and regulations that oversee companies and their actions, ensuring the environment is preserved. There are often ramifications and consequences if companies are caught breaking these regulations. In the article that I read, a company called Barrick Gold Corporation was in the process of constructing a gold mine in Chile, worth 8.5 billion dollars. However, thanks to government regulations, a Chilean court suspended operations until they build an infrastrcuture that will prevent water pollution. There were claims that operations were harming glaciers and water supplies so the government demanded  suitable testing and infrastructures in order to preserve the environment. Barrick stated that they were fully committed to complying with the governments’ demands.

Clearly, there are ethics involved in business and the environment. In this case, Barrick Gold Corporation could have continued to harm the environment if the government did not step in. I believe that a big part of ethics in business has to do with accountability as well as government aid. In this case, the government took actions which led to full compliance from the Barrick Gold. While there are still many companies that use unethical practices, the fact that there are regulations keep companies accountable. Also, a point to be brought up should also be that many companies take ethical actions in order to give the public a better impression. Good PR may often boost sales or just give them a competitive edge compared to companies that aren’t ethical.

http://business.financialpost.com/2013/07/15/barricks-pascua-lama-mine-to-have-work-suspended-by-chilean-court-report/

http://img.src.ca/2013/05/27/635×357/130527_d87j7_rci-barrick-chile_sn635.jpg