Author Archives: Katryna Cheung

In response to Harvard Business Review’s blog “Don’t Start a Company with your Business School Pals”

Companies fail for all sorts of different reasons and I don’t believe that the reasons Michael Fertik provided are the only attributes to an unsuccessful business. While I agree that starting a company with friends is not always the best idea, I don’t believe it is because of an artificial relationship. Going into business with any friends, whether they be school friends or not, is dangerous, and you always run the risk of butting heads.

With my three-month experience of University, or Business school in specific, I think the opposite is true of what Fertik had expressed in his blog. I have met so many different personalities and a wide variety of different thought processes. I believe that if I were to be in junction with one of my fellow classmates there would be no shortage of different lenses that we could look through.

Picture: http://b1advanced.com/wp-content/uploads/2013/01/friends.jpg

References:

External Blog: “HBR Blog Network.” Harvard Business Review. N.p., n.d. Web. 18 Nov. 2013. <http://blogs.hbr.org/2013/11/dont-start-a-company-with-your-business-school-pals/>.

In response to Brooke Besley’s blog post about Pinterest, it has been found that Pinterest is the “fastest-growing platform for online sharing.” As mentioned in Brooke’s blog, Pinterest has recently started experimenting with advertisements as a source of revenue. They have begun allowing businesses to add “Pin It” buttons to their websites. This is especially useful for small businesses that are trying to establish brand recognition. Pinterest is a highly visual medium that allows businesses to catch the consumer’s attention through beautiful pictures of their products or services. Although Facebook and Twitter have been proven to work, I agree with Brooke in that visual marketing can be much more effective for certain types of products and businesses.

Investors are also jumping onto the Pinterest bandwagon as they see the potential in this visually focused form of social media. Pinterest is able to track exactly what their consumers are wanting to purchase and from what site they plan to purchase them from.  This is an easy way for companies to know exactly what their consumers are looking for. Pinterest still has yet to make any money, but this promising social media site a start-up current worth at $3.8 billion. That’s pretty impressive for the “digital equivalent of cutting photos out of magazines.”

Pictures: http://www.josintheknow.com/wp-content/uploads/2013/05/Jos.In_.The_.Know_.Pinterest.jpg

http://rack.2.mshcdn.com/media/ZgkyMDEyLzEyLzA0L2FmL3BpbnRlcmVzdGJlLjU3US5qcGcKcAl0aHVtYgk5NTB4NTM0IwplCWpwZw/258bfeb5/070/pinterest-behind-the-design-of-an-addictive-visual-network-dd27b017d9.jpg

References:

“Why Investors Love Pinterest So Much.” Bloomberg Business Week. N.p., n.d. Web. <http://www.businessweek.com/articles/2013-10-24/why-investors-love-pinterest-so-much>.

Zara seems to be that happy medium between a high-end designer and Forever 21. You’re never breaking the bank when you decide you’re in dire need of some retail therapy and you never catch 20 people wearing the exact same jacket you just bought, but if you absolutely need to get your hands on a gorgeous dress your girlfriend recently wore, they usually still have a couple left in stock. According to the blog post “Zara’s Organizational Structure”; Zara has a very lean organizational structure that emphasizes high performance. Zara puts an emphasis on consumer satisfaction and many of their decisions are made based on consumer purchases.

Zara has fast turn over of inventory, which allows them to restock their racks with products that meet the consumer’s needs. The headquarters located in Arteixo manages all things Zara. They have designed a highly centralized design, manufacturing, and distribution system that allows all 1,770 stores to run smoothly and efficiently. Zara has mastered the art of making each individual storefront feel tailored to their consumer, they understand their customers and are able to successfully meet their needs.

Picture: https://blogs.ubc.ca/ceciliaw/files/2012/11/zara.jpg

References:

Apple has recently been losing market share to Android; in Q3 of 2013 Android made 81 percent of devices shipped where as Apple only made 12.9 percent. This hasn’t worried Apple executives though. Android may be dominating the market, but Apple is sitting pretty with 56 percent profit in all of the mobile device market in the same period. Apple’s primary competitor is not Android, but Samsung specifically. Samsung made 53 percent profit, totalling over 100 percent between Apple and Samsung, due to losses in other mobile device companies during this period.

Apple has an act of controlling profit in every market they’re in. Even though Android maintains greater than a six-to-one advantage in market share, Apple still sells more apps and they generate more advertising revenue than Android.

It becomes quite apparent, after reading about this, that Apple’s prices are significantly higher than Android. The loss of market share Apple faces does not worry them mostly because Apple’s sales, revenue and profit continue to rise. Apple is evidently not losing their consumer base to Android, Android is just coming out with cheaper mobile devices in order to tap into a new consumer market.

References:

Bradley, Tony. “Android Dominates Market Share, But Apple Makes All The Money.”Forbes. Forbes Magazine, 15 Nov. 2013. Web. 16 Nov. 2013. <http://www.forbes.com/sites/tonybradley/2013/11/15/android-dominates-market-share-but-apple-makes-all-the-money/>.

I tend to agree with Jennifer Yip’s blog post about Lululemon founder, Chip Wilson, commenting on the company’s diverse consumer base. Wilson’s comments have attracted negative attention to Lululemon and have been perceived as an excuse for the distribution of sub-par products. Although I understand that not all materials and fabrics are meant to withstand any, and all sorts of wear and tear, I also believe that Wilson’s comments about the rubbing of thighs, stretching of fabrics, and different size women displaced his responsibility to acknowledge that his products were not meeting the standards Lululemon promises its customers.

“Life is full of setbacks, success is determined by how you handle setbacks.” This is one of Lululemon’s manifestos. It is apparent that Wilson did not initially deal with the setback of the sub-par products in the best way. He made excuses and came off as insensitive; Wilson recently reached out to the public by releasing an apology video. Although this will not erase all of the comments said during his Bloomberg interview, it is one step forward to rebuilding Lululemon’s strong community.

Pictures:

http://www.lululemon.com/about/manifesto#

References:

“Lululemon Founder Chip Wilson Says Pants ‘don’t Work’ for Some Bodies.” CBCnews. CBC/Radio Canada, n.d. Web. 16 Nov. 2013. <http://www.cbc.ca/news/business/lululemon-founder-chip-wilson-says-pants-don-t-work-for-some-bodies-1.2417980>.

O’Connor, Clare. “Do You Accept Lululemon Billionaire Chip Wilson’s Teary Apology Over His Body-Shaming Comments?” Forbes. Forbes Magazine, 11 Nov. 2013. Web. 16 Nov. 2013. <http://www.forbes.com/sites/clareoconnor/2013/11/11/do-you-accept-lululemon-billionaire-chip-wilsons-teary-apology-over-his-body-shaming-comments/>.

Snapchat might just be the best example of how your crazy ideas could make you, not millions, but billions. The entrepreneur and co-founder behind Snapchat, Evan Spiegal, is enjoying the recent attention his smartphone app is attracting. After rejecting Facebook’s $3 billion dollar offer to buy out the company, Snapchat stated that they would not accept any acquisitions or investments until early next year.

This app has become overwhelmingly popular amongst teens and people in their early 20s, and as a teenager myself; I know that I jump from one fad to the next with a snap of a finger. Although Snapchat projects that their numbers will improve in 2014, teenagers can jump off the bandwagon over night and be consumed by the next hottest thing in seconds. The longer Snapchat waits to sell, the higher the risk of losing out on the cash.

Pictures:

http://media.salon.com/2013/11/snapchat-ceo.jpeg-1280×960.jpg

http://socialmediatoday.com/sites/socialmediatoday.com/files/imagepicker/246411/snapchat.png

References:

As technology continues to innovate households are moving away from hand written letters, greeting cards and paper bill paying which has been detrimental to the U.S. Postal Service. The numbers of written letters and greeting cards has dropped by 80 percent since 1987, and as the option online bill paying has become more popular, mailed bills have dropped from 75 percent to 40 percent. Which has increased online billing paying from 17 percent to 56 percent.

Although these forms of first-class mail are becoming much less desirable, online shopping’s popularity has gone through the roof. Amazon recently struck a deal with the U.S. Postal Service announcing that they will be providing Sunday package delivery to New York and Los Angeles and plans to expand to other cities next year. This deal provides the USPS with a badly needed new revenue stream after a $15.9 billion loss last year largely due to the significant decrease in the use of first-class mail.

Pictures:

http://www.sourcelink.com/images/esig/83156548.png?sfvrsn=0

http://www.nchannel.com/wp-content/uploads/2012/07/amazon-logo.jpg

References:

Airbus and Boeing have been battling it out in the commercial market for years. They have had legal fights over government subsidies and other forms of state aid, but their most recent battle was for Japan Airlines’ fleet purchase contract to replace the Boeing 777 jets.

Japan Airlines has been a loyal customer to Boeing for over 50 years, but JAL recently made a deal worth 950 billion yen ($9.5 billion US) to purchase 31 A350 jets. JAL President Yoshiharu Ueki stated that the A350s were selected because they were “the best match for their needs”. With the switch in aircraft manufacturers, JAL pilots will have to undergo additional training to learn how to fly Airbus jets. Even with this cost and risk taken into consideration Ueki expressed that this was the best decision for the company.

Boeing has stated that despite JAL’s deal with Airbus, their relationship still holds strong. Boeing is “disappointed with the selection” but they “will continue to provide the most efficient and innovative products and services that meet longer-term fleet requirements for Japan Airlines”. JAL has said the new A350s will be in service in 2019 and they will replace the Boeing 777 jet’s routes.

References:

“Japan Airlines Chooses Airbus over Boeing for New Jet Order.” CBCnews. CBC/Radio Canada, n.d. Web. 08 Oct. 2013. <http://www.cbc.ca/news/business/japan-airlines-chooses-airbus-over-boeing-for-new-jet-order-1.1928080>.

Picture: http://cdn.poskyarchive.com/777-300/Model%20Packages/Japan%20Airlines%20777-300ER%20-%20Yokoso%20Japan!%20Livery%20JA731J.jpg

Excitement over Twitter’s new stock offering prompted investors to jump the gun this week to buy into a company with no association to the social media site. Tweeter, a bankrupt electronics company, saw an active day of trading on Friday. The mix-up left Tweeter’s nearly worthless stock, which closed the night before at the price of less than a penny, to be bought for a high of 15 cents with over 14.3 million shares traded by midday.

Many look at this mix-up and wonder how investors could have been so careless to invest in a completely unrelated company, but Twitter had proposed to investors, last Thursday, that their stock symbol would be “TWTR”. This closely resembled Tweeter’s stock symbol, “TWTRQ”. By noon on Friday shares were halted under the terms of Rule 6440, which FINRA uses in “circumstances in which it is necessary to protect investors and the public interest.”

Twitter’s initial public offering in early September has, evidently, left investors eager to invest. The company will likely go public around Thanksgiving and is expecting to raise about $1 billion in its IPO.

References:

“The Globe and Mail.” The Globe and Mail. N.p., n.d. Web. 06 Oct. 2013. <http://www.theglobeandmail.com/report-on-business/international-business/us-business/tweeter-home-shares-explode-on-apparent-twitter-mix-up/article14700115/>.

“The Globe and Mail.” The Globe and Mail. N.p., n.d. Web. 06 Oct. 2013. <http://www.theglobeandmail.com/technology/twitter-takes-first-step-in-bid-to-go-public/article14301505/>.

PISANI, JOSEPH. “Twitter Mix-up.” Yahoo! News. Yahoo!, 04 Oct. 2013. Web. 06 Oct. 2013. <http://news.yahoo.com/twitter-tweeter-investor-mix-185116289.html>.

Picture: http://cdn2.business2community.com/wp-content/uploads/2013/02/twit.jpg

Determined to increase profits and boost stock prices, Enron’s CEO, Kenneth Lay and President, Jeffrey Skilling abandoned business ethics in order to maximize their company’s success.

When oil and gas were deregulated in 1996, Enron expanded its business from gas distribution to also include energy trading. During this time, a significant amount of money was needed to support the company’s diversification plans, and Enron increased its borrowings to pursue growth.  In order to attract investors, Lay and Skilling manipulated Enron’s financial reporting to conceal debt and show the company in the best possible light. As part of the executives’ plan to deceive investors, a limited partnership named Chewco Investments was created to keep costs off Enron’s books. The strategy worked and initially led to increased stock prices in the latter half of the 1990s.  In 2001, a Fortune magazine columnist caught the attention of the financial community when she publicly questioned whether or not Enron was overpriced. With attention drawn to Enron’s questionable financial practices, Lay issued an email to reassure all employees that the company’s stock will continue to climb. Despite Lay’s act of confidence to his employees, however, both he and Skilling sold off their stocks throughout 2001. In late 2001 Enron admitted to owing over $6 million dollars in debt and filed for bankruptcy protection. It took Enron several years to compensate ex-employees for their losses.

Enron is an excellent example of how unethical business practices deface a company and lead to the inevitable downfall of that company.

http://www.crimeradius.com/Enron_A_Disaster_Years_in_the_Making