Month: September 2013

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