Month: October 2012

WestJet recently named their new regional airline, Encore, which is going to serve many smaller communities, using smaller Bombardier planes, not the regular Boeing 737s like all of WestJet’s regular fleet. WestJet let their employees, the WestJetters, name the new airline, which also relates to the fact that it was also named one of Canada’s Top 100 employers.

In COMM 101 class, we discussed the efficiency of WestJet’s one-size plane system, with Boeing 737s flying all distances. This new airline and the smaller planes allow WestJet to save some of the costs related to operating large planes for relatively smaller distances. Cutting some of the legroom can significantly increase profit margin in this case. The naming of the new regional airline was also done by the 8600 WestJetters. There are many ways that these employees are motivated, such as onsite amenities, discounted airfare, and in-house apprenticeship programs. Motivated employees improve the company’s organizational culture, providing a good environment for customer service as well.  In marketing terms, WestJet’s point of difference is its excellent customer service, seen from their internal motto, “We succeed because we care”. The new regional airline also got communities involved on social media, with many communities pleading for a stop in their region. Considering how WestJet is an airline (the worst when it comes to making profit), it’s doing pretty well in cost management, organizational behaviour, and marketing.

Sources:

http://ca.finance.yahoo.com/news/westjet-again-named-one-canadas-131700320.html

http://www.calgaryherald.com/business/WestJet+names+regional+airline+Encore/7377445/story.html

Image:

http://www.bombardier.com/files/en/supporting_docs/image_and_media/products/BA-Q400_NextGen_Westjet1-HR.jpg

With China’s consumers changing taste, many large luxury-good companies like Louis Vuitton and Burberry are experiencing slower sales growth.

Jeremy Liang mentioned in his post about China’s consumers abandoning LV because it was easily forged. I think that a change in consumer taste is a bigger factor. I agree that people are trying harder to not be ordinary, like the shift away from the iPhone because it was becoming too common. China’s luxury consumers are becoming pickier, buying the best-quality products to discriminate themselves from the crowd. Quality of the products is becoming more important than the brand name (bad news for LV and Burberry). For Chinese consumers, the “ultrahigh-end” of the market is a way for people to be different from the rest. In my opinion, this cultural shift is good for consumers, because they are starting to realize the value of quality over just a brand name.

Image: http://daxueconsulting.com/wp-content/uploads/2012/08/daxueconsulting-Louis-Vuitton-in-China2.jpg

According to new data released by the Real Estate Board of the Greater Vancouver area, the residential properties sold in September this year totaled 1516, 32% less than September of 2011.

Since the government eliminated the 30-year mortgage, buyer demand for housing has decreased. With real estate becoming less affordable and the demand curve shifting to the left, quantity demanded decreases, and hopefully price will drop too. I remember when my parents bought our first home here in 2007, and the housing prices were at an all-time high. At that time, there was a mortgage option of taking 40 years to pay it all back. My parents didn’t like that option, but it certainly brought many other homebuyers into the market, increasing the demand for housing and boosting up the price. And of course, many new (rich) immigrants also impacted the demand of housing. The cost of living here was starting to outweigh the benefits. Many locals who grew up here can’t afford to stay, possibly including future me. News that housing prices are at least starting to decrease brought a smile to my face.

Source: http://www.cbc.ca/news/business/story/2012/10/02/vancouver-housing-plunge.html

Image: http://kenstef.com/w=kenstef.com/_media/Images/sold-sign.jpg%20smaller.jpg