Image via Flyertalk

Despite efforts from the American antitrust division –who filed a lawsuit to block the merger in August–, the U.S. Justice Department has approved the last hurdle of a merger that will form the largest airline in the world.¹

The two companies have noted that customers are unlikely to see any noticeable short-term changes, but the monopolistic effects of the newly formed company could be substantial.

For instance, the Justice Department’s antitrust division emphasized “that competition would decline significantly on more than 1,000 routes where the two companies currently compete head-to-head…and the new[ly] combined American Airlines would control 69 percent of the limited takeoff and landing slots at Ronald Reagan National Airport near Washington, giving it a near-monopoly there.”2 USA Today’s Gary Leff wrote an interesting column on 3 lessons for the two companies. Many of his ideas coincide with my own ideas posed below.3

Though it is undetermined whether the issue of reduced competition will adversely affect customers in the long run, it is clearly evident that the merger will lead to an Oligopoly, where the big 4 –Delta, United, Southwest and the merged US and American Airlines– will have the dominance and power to fix prices, increase barriers to entry, and limit the number of firms that make up the airline industry.

Sources:

¹ http://www.cbc.ca/news/business/american-airlines-us-airways-get-final-merger-ok-1.2424053

² http://www.nytimes.com/2013/11/14/opinion/an-unwise-airline-merger.html?hp&rref=opinion&_r=0

3 http://www.usatoday.com/story/opinion/2013/11/13/gary-leff-american-us-airway-merger-lessons/3519123/

Image by Yahoo Auto via Entrapreneur

A 3-D Printed Hybrid Electric/Gas Car that can drive across the U.S on 10 gallons of gas? Talk about impossible.

Yet this is exactly what entrepreneurs Cody and Tyler Kor have created: A three-wheeled, aerodynamic car that needs just 10 gallons for a 44 hour, 2,900-mile journey from New York to San Francisco and back. If this wasn’t enough, the local 3-D printing process ensures that the vehicle is relatively affordable ($16,000-$50,000 depending on output), safe (meets or exceeds road-worthy safety standards) and minimally impactful on the environment.¹

As one of the chief engineers for the project, Kor affirmed that “designing for sustainability can arguably be humanity’s biggest and most important challenge of the coming century”, adding, “it’s something we absolutely need to get right.”1

In an age of stiff commercial competition, the notion of social entrepreneurship and responsibility remains an important topic that is rarely addressed. Social entrepreneurs such as the Kor brothers act as catalysts for change; they develop innovative solutions to social and environmental problems, resulting in wide-scale change. Similarly, companies such as Kor Ecologic continue to prove that corporate success can be achieved while pursuing suitable solutions to social and environmental problems. Nevertheless, in the end, it is imperative that business schools and companies alike continue to address this issue to build a stronger and more responsible generation of entrepreneurs and businessmen.

Sources:

1 http://www.entrepreneur.com/article/229882

Image by Shannon Stapleton via the Star

In a shocking turn of events, BlackBerry Ltd. is abandoning a proposed sale to Fairfax, andwill instead raise about $1 billion from investors, while replacing its CEO. ¹

As part of the new agreement, former Sybase AG CEO John Chen will assume BlackBerry’s top position.

Reaction was mixed within the BlackBerry community, with Chairwoman Barbara Stymiest saying “today’s announcement represents a significant vote of confidence in BlackBerry” and that the “pursued the course of action… is in the best interest of BlackBerry and its constituents, including its shareholders”. ¹ Others such as Fairfax CEO Prem Watsa were apprehensive towards BlackBerry’s decision, as Heins stands to make as much as $55.6 million under the change of control provisions in his contract. ²

It has yet to be determined if BlackBerry is pursuing the right strategies for its long-term success. Blackberry has consistently failed to market its newly improved product portfolio. As evidenced in Colleyna’s blog post, it is imperative that a company successfully markets its brand image, while capitalizing on its strengths and opportunities while avoiding its weaknesses and threats.

Thus, uncertainty is certain for BlackBerry’s imminent future. Despite this ambiguity, BlackBerry’s radical turn of events is sure to lead to an immense culture change, whiledeterring employees’ affective commitment and confidence toward the leaders of the struggling company.

Sources:

¹http://www.thestar.com/business/2013/11/04/blackberry_abandons_sale_ceo_thorsten_heins_out.html

²http://o.canada.com/business/blackberry-ceo-stands-to-receive-55-million/

Image by Snapchat via DailyMail, hyperlinked video via Bloomberg

Since its inception two years ago, the Venice, California based Snapchat has seen explosive growth within the social media realm.

Recently in September, Snapchat announced that the company was “processing 350 million ‘snaps’ per day”, putting the social media giant on par with Facebook, which also counts approximately 350 million photos/video uploads per day.¹ Despite the lack of revenue streams, its great value proposition has enabled Snapchat to gain great exposure in the market: according insider sources, Facebook  “is willing to dig deep into its cash pile to reach young people” and has offered $3 billion to purchase the company.

Only four months after raising $60 million, Snapchat, the instant photo messaging company is rumored to be in search of a valuation of $3.6 billion. According to AllThingsD, Snapchat has yet to close the immense deal, but an Asian giant is rumored to be in the financing lead.¹

Snapchat’s ambitious plans may net them the capital they value, yet it may parallel a prior social-media giant. Snapchat’s somewhat high-valuation serves as a reminder of Facebook’s IPO mishap, in which ended up being the “biggest IPO flop ever.”² Thus, it is with only time that we will understand if Snapchat’s determined ambitions will serve to benefit them in the long run, rather than just the short run.

Sources: 

¹http://allthingsd.com/20131025/snapchat-is-mulling-another-huge-round-at-a-3-5-billion-valuation/

²http://www.theatlantic.com/business/archive/2013/05/facebook-one-year-later-what-really-happened-in-the-biggest-ipo-flop-ever/275987/

Image by Andrew Biraj via The Star

After a series of protests and media scrutiny, Loblaw Cos. Ltd. has finally provided a framework for how it will compensate the victims of the deadly collapse of a clothing factory in Bangladesh, which was the supplier of Superstore’s ‘Joe Fresh’ clothing line.¹

Loblaw’s proposed plans of compensation have come 6 long months following the collapse of the Rana Plaza factory building, which in turn resulted in the world’s worst industrial accident in nearly 3 decades. Leaving 1,128 people dead and countless others injured, the event provoked furious outcry around the world, prompting the clothing industry to begin looking into initiatives that will improve many suppliers’ safety standards.²

This story brings forth the issue of social entrepreneurship and shared value policies, and how most companies around the world continue to ignore many social and equality standards, adhering to profit maximizing strategies instead. As outlined in Alex’s blog post, the issue of ethic in business seems to be rarely addressed.

On Thursday, Loblaw’s spokesman Bob Chant encouraged other “brands that have been involved in production at Rana Plaza to participate in the provision of compensation to the victims of this tragedy.”²

Though eternally tragic, this catastrophic has the chance to change the views of thousands of companies around the world, in encouraging the growth of social enterprise, awareness and equality around the world.

 Sources:

¹http://www.cbc.ca/news/business/bangladesh-garment-workers-to-get-compensation-from-loblaw-1.2223499

²http://www.theglobeandmail.com/report-on-business/international-business/loblaw-to-compensate-victims-of-bangladesh-factory-collapse/article15041964/

Image by Joseph Pisani via The Associated Press

Twitter, the multi-billion dollar social media giant can’t seem to stray from stock market news.

With skyrocketing popularity among the general populace, advertisers and celebrities alike, Twitter has undergone massive growth over the past few years. Earlier in 2013, Twitter announced its plan to go from private to a public company, and is projected to sell its shares at between $17-$20 per unit.¹ However, “Tweeter”, a different company with a similar name was the source of this groundbreaking news.

Shares of Tweeter (a bankrupt and defunct US electronics distributor) which were previously valued at a penny per stock, surged more than 1,000% during the first 8 days of October, when excitement and anticipation surrounding Twitter’s imminent IPO stocks resulted in confused investors purchasing the wrong company’s shares.²

Bloomberg’s stock market analysts said more than 14.3 million shares of Tweeter were exchanged on October 4^th, the most since 2007.³

This astounding stock market fiasco is a striking reminder for investors, businessmen and consumers alike: to thoroughly research and be informed before coming to a decision on any matter.

 Sources:

¹http://www.marketoracle.co.uk/Article42811.html

²http://www.theglobeandmail.com/report-on-business/tweeter-stock-symbol-changed-following-twitter-mix-up/article14751690/

³http://www.bloomberg.com/news/2013-10-04/twitter-look-alike-ticker-triggers-684-advance-in-penny-stock.html

With the fate of the Keystone XL Pipeline project in U.S President Barack Obama’s hands, Prime Minister Stephen Harper remained adamant in underlining that he would “keep pushing forward” for the completion of the project. ¹

Harper, who stood in front of a group of business leaders in New York, continued to accentuate the potential positives of the proposed project, Harper proclaimed that with negligible environmental impact and with prospective economic benefits, “the logic behind [the] project is overwhelming”. ¹

However, NDP Natural Resources critic Peter Julian -one of many critics condoning Harper’s approach- , characterized the Keystone XL project as “a major irritant in Canada’s relationship with our closest trading partner”. ¹ Liberal critic Geoff Regan was also condoning of the project, saying that the “Keystone XL pipeline is costing Canadians’ jobs and damaging our relationship with our most important trading partner”. ¹

In the end, countless critics will continue to condemn Harper and His Conservatives for their continued push for the Keystone XL Pipeline Project. Ultimately, it is important to distinguish the Opportunity Costs, Economic Spillovers and the Feedbacks that are involved with such an immense business decision, to ultimately determine if the Keystone Project will bring about Market Efficiency (Net Benefit) to all Canadians.

Image by Laris Karklis via the Washington Post

Sources:

¹ www.cbc.ca/m/touch/business/story/1.1869439

Image by Mobilicity via the Cellular Guru

The battle for cellphone frequencies continue to rage as “The Big Three” -Rogers, Bell and Telus- remain entangled with the federal government in a struggle for new wireless spectrum.

Now, Canadian consumers must choose between the phone giants and the Canadian government.

On one side, the Big Three have emphasized that by gaining greater spectrum, they would be able to create jobs while defending the Canadian industry from foreign mega-corporations such as Verizon.¹

However, the federal government continues to affirm that “Canadians pay some of the highest wireless rates in the developed world”. ¹

 On Monday, September 23^rd, Industry Canada published a list of bidders for the telecom spectrum; a list that did not include any foreign companies. The federal government supported this list, highlighting that “our largest wireless companies hold 85% of the airwaves”. ¹

Currently, the government has placed restrictions on the Big Three: they are prohibited from buying the spectrum from the current bidding process.

Using perceptions based on parity, difference, and frame references, the Big Three has maximized its target profit and supplier power, effectively maintaining a monopoly in the Canadian Telecommunications Market.² Thus, it is imperative that they are prohibited from competing for the newly released spectrum, to help promote competitive parity, which will ultimately benefit Canadian consumers.

Sources:

¹ http://www.cbc.ca/news/as-wireless-spectrum-battle-heats-up-ottawa-takes-the-first-swipe-don-pittis-1.1864872

² http://www.ctvnews.ca/business/industry-canada-says-15-participants-in-wireless-spectrum-auction-1.1466409

Image by Jamie Sturgeon via Global News

Following an immense second quarter loss of close to one billion dollars -largely due to its vastly unsold inventory-, BlackBerry is headlining Business news once again; though, for a different reason.

On Monday, September 23, BlackBerry Ltd. accepted a purchase offer by a group led by Toronto based Fairfax Financial Holdings Ltd.

The news emerged merely days after BlackBerry’s massive quarterly losses but amidst the negativity, the deal may signal a positive change for BlackBerry as a company.

According to Blackberry, the company sold merely 3.7 million smartphones inQ2, and said that the cutting of 4,500 jobs (one-third of its workforce) will “stabilize the business and allow them to potentially keep going”. ¹ Analysts such as Iain Grant from the strategy firm SeaBoard Group praised the deal, citing that “taking it private [is] the only way to save anything”. ¹ Selling at a steeply discounted $9 (US) per share, the Fairfax led group of associates have six weeks to complete the deal.

BlackBerry has failed to capitalize on its Key Operations Principles (Processes, inventory, variability, capacity, measurement, quality) and has held poor points of parity and difference compared to competitors such as Apple and Samsung. Nevertheless, in the end, a tentative deal to take BlackBerry private will provide the company with less scrutiny and more time to focus on the business-oriented target market.²

Sources:

¹ http://www.cbc.ca/news/canada/blackberry-takeover-offer-buys-company-time-1.1865640

² http://www.reuters.com/article/2013/09/24/us-blackberry-offer-challenges-analysis-idUSBRE98N16020130924

Image by vrangnarr via Redbubble

Apple, the World’s most valuable company, is making headlines again.

In light of its new iPhone 5S and iPhone 5C products, reports have surfaced revealing a series of legal and ethical violations in a factory in Wuxi, China, where the newly unveiled iPhone 5C is being manufactured. According to an undercover investigation by the China Labor Watch, “hiring discrimination, illegally inadequate pre-work training and millions of dollars in unpaid overtime wages”¹ are just some of the ongoing violations that contradict the codes of conduct set forth by Apple.

Apple has been associated with instances of unethical business practices in the past, with the Foxconn and Pegatron controversies serving as prime examples. In 2012, in an effort to take responsibility amid hostile reports on working conditions, Apple joined the Fair Labor Association, citing its support for transparency in its factories.²

In the short term, iPhones, iPods and iPads alike continue to fly off the shelves.“Social Responsibility” is a key aspect to a successful business as outlined by Friedman. Following this, Apple is continuing to take appropriate measures to eradicate the trend of immoral practices in its business. However, only time will tell how Apple’s involvement with ethical issues will affect long-term sales.

Sources

¹ http://www.chinalaborwatch.org/news/new-463.html

²http://www.apple.com/supplierresponsibility/accountability.html