Burger king is an international chain of fast food restaurants. It is one of the most prominent fast food restaurants, with over 11.4 million customers daily. Furthermore, it decided to open it’s first outlet in Russia^1. Which makes me wonder, will Burger King prosper in the Russian fast food industry?

Russian Burger King Poster

Burger King’s main competitor, McDonalds, has had great success in Russia; it went from having 1 shop in 1990 to 235 currently^2. Although this may seem like a threat since McDonalds is Burger Kings rival, it is also an opportunity. Burger King and McDonalds have similar business plans and target markets, plus, they both have prodigious success in the same market (North America) for many years. Therefore, the fact that McDonalds has had such achievement in Russia signifies that Burger King can do so as well.

Footnotes:

^1- RIA Novosti, 10/01/21, http://en.rian.ru/russia/20100121/157640260.html

^2- USA Today, 10/01/21, http://www.usatoday.com/money/industries/food/2010-01-21-russianburgerking_N.htm

Ryanair is an Irish airline that gained worldwide recognition through it’s unmatchable low prices^1. In fact, Ryanair offers flights that are two to three times less expensive than other airlines. On the other hand, it charges its customers with hidden fees and services to increase revenue^2.  Which raises an interesting question, although Ryanair is not acting illegally, are its procedures and business plan unethical.

Ryanair receives revenue through hidden fees

In short, Ryanair’s hidden fees are definitely unethical. For instance, if a customer does not check-in online, they are charged a fee. Also, if customers do not use a certain type of credit card, they are charged again^3. Ryanair’s business strategy consists of various small charges that are hidden behind their “low priced tickets”. Therefore, a business should aim to increase total revenue, but Ryanair is doing so unethically, which could eminently damage their image and costumer base.

Footnotes:

^1- Ryanair website, About us, http://www.ryanair.com/ie/about

^2- Cheap Ryanair Flights, http://airfare.bootsnall.com/airlines/ryanair-flights.html

^3- Anna Tims, The Guardian, 08/02/01, Guarhttp://www.guardian.co.uk/money/2008/feb/01/consumeraffairs.ryanair

The National Basketball Association is a prominent men’s professional basketball league, with over 5.5 million viewers during the 2011 final game^1. Unfortunately, immediately after the final game, the NBA players and owners began disputing on player salaries. The purpose of this disagreement is that the team owners want to make a decrease in the player salaries, but the players are unwilling to give up the asked amount^2. After several meetings, the NBA’s commissioner and representatives have decided to pursue a lockout, having many questions it’s future. As a result, are NBA players being intelligent by not accepting a lower salary, or just stubborn?

First, the salary decrease is quite reasonable because it will not substantially affect the player’s income. In 2011, the players would receive 57% of the total revenue made through the NBA. The team owners want to decrease this to 54%; a decrease of 3% in player incomes^3. Therefore, the salary cap for each team will drop from 58 million to 56.42 million dollars^3. Furthermore, It seems that the Owners have no intention on reconsidering their decision; consequently, the players will have no job at all if they do not accept the proposed incomes.

The NBA is in a lockout.

Footnotes:

^1- Bill Gorman, 11/05/27, http://tvbythenumbers.zap2it.com/2011/05/27/2011-nba-playoffs-on-tnt-average-5-5-million-viewers-most-watched-in-cable-television-history/94080/

^2-Sid Chadha, 11/09/22, NBA Lockout Overview, http://gotsportsblog.com/nba-lockout-overview/

^3- NBA News, Official NBA website, 11/10/09, http://www.nba.com/home/index.html

The Netflix logo

Netflix Inc. is an online video rental and movie streaming company based out of the United States^1. In fact, it is the largest company in the online media streaming industry with over 8 million subscribers worldwide^2.

Due to Netflix’s international success, it has decided to make dramatic price increases (as much as 60%). This choice is really testing the company’s customer loyalty and price elasticity^3. Which raises an interesting question; how will Netflix’s current customers respond to its increase in prices?

The answer is simple, they will unsubscribe to Netflix. Although it has over 8 million loyal subscribers, there are several substitutes for Netflix. For example, video rental stores, other online media companies, Video on Demand, etc. In today’s feeble economy, most people will decide to purchase these options over Netflix to save money.  Therefore, Netflix has a large price elasticity because their will be a decrease in demand for it when it’s prices increase. In other words, an increase in price results in a decrease in demand. As a result, Netflix’s rise in rates will likely result in a considerable loss in its clientele.

Footnotes:

^1- Netflix: Overview, http://ir.netflix.com/

^2-Netflix-Company Information, http://venturebeatprofiles.com/company/profile/netflix

^3- Rob Frieden, Netflix Tests Subscribers Price Elasticity and Loyalty, http://telefrieden.blogspot.com/2011/07/netflix-tests-subscribers-price.html