Month: November 2013

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/