Kelvin Leung's Blog

Microsoft has announced its intent to close its instant messenger chat tool “Windows Live Messenger” in early 2013, and replace it with Skype’s messenger tool. After almost two years after its Skype acquisition in 2011, Microsoft is finally fully embracing its $8.5 billion Internet communication technology. Analysts have predicted that Microsoft will one day focus on Skype in order to move into the social media market, and eventually to the mobile computing market. Recent reports have suggested that the numbers Window Live Messenger’s users had fallen to 8.3 million in the US, representing a 48% on a yearly basis. Skype, on the other hand, had seen growth in the same period.

I think it is a poor move for the tech giant to focus solely on Skype. Although Window Live Messenger and Skype are basically competitors in the same company, they can still both be successful if they operate in different paths. By combining the two, it will be a merge of work and leisure. Window Live Messenger symbolizes leisure with the integration of games and other fancy applications into the program, while Skype shows the work aspect with stable communication network and cheap international calls. If Window Live Messenger joins Skype, Microsoft must then incorporate games to attract younger users, but risk losing business users in return. I personally believe that it will greatly benefit Microsoft if the two companies are to operate in different directions.

http://www.bbc.co.uk/news/technology-20222998

Over the past few weeks, the most talked topic within China revolves around the leadership change in the 18^th Congress. Xi Jinping was named the Head of China’s Communist Party and chairman of the country’s Central Military Commission. Right now, he is the most powerful man in China. From the title of this blog, the change appears to be good for the business side, but bad for political reform. How?

Compared to his predecessor Hu Jintao, Xi Jiping as China’s new leader will be quite different. In Kevin Voigt’s blog, he states that Xi Jiping is more of a conservative, meaning that there will be no “substantial or meaningful movement toward political reform”, but instead, China will focus on “maintaining political stability and defusing challenges to the party’s authority.” Also, Kevin Voigt explains that there will be economic reform. In other words, China will be more willing to open its market and allow more “foreign companies into the financial sectors.” Previously under Hu Jitao, there were heavy regulations for foreign companies and multinational companies were kept distances away. To worsen the situation, Chinese officials always have a widespread distrust of the motives of foreign companies. The change in leadership will definitely shred some light for foreign companies on their road into the vast Chinese market.

Link to external blog

http://www.bbc.co.uk/news/world-asia-china-20338556

In early April, social enterprise TOMS Shoes hosted an aware-raising event called “A Day without Shoes.” TOMS is basically asking its participants to not wear shoes for one day, in order to raise awareness for the millions of children who go without shoes every day in poor countries. A model for this social enterprise is the “one-for-one” approach. It means that for every pair of TOMS shoes purchased, TOMS is giving away a pair of new shoes to a child in need. By providing children with shoes, they can then go to work or school to better educate them. Shoes are clearly wanted and needed by the people TOMS is serving.

However for a normal customer that occasionally shops at TOMS, it isn’t much of a deal to pay extra dollars to get a TOMS shoes and help a child at the same time. They might be just buying the trendiness of the brand. Therefore, some criticizes that the program “dehumanizes poor people and set priorities for them”. Also, some argues that by giving shoes away, it will interfere with local shoe markets, and ultimately create more poverty. So is TOMS doing the right thing as a social enterprise?

http://www.huffingtonpost.com/kate-otto/toms-shoes-controversy-a-_b_1420366.html

https://www.youtube.com/watch?v=_4VN34iCi2Q&feature=player_embedded

In response to Frederick Wong’s blog on the implementation of the Smart Meters in BC, I can only say I completely agree. It is clear that there have been negative feedbacks from citizens regarding the mandatory installation of the smart meters at their own homes. Smart meters seem to provide fewer benefits for the people, but much more advantages to BC Hydro. Many citizens fear that the smart meters will act as a surveillance tool to record a person’s daily electricity consumption. The recorded information can ultimately translate into one’s personal privacy and activities.

I totally agree on Frederick’s point on the citizen’s disapproval of the smart meters, but would argue on his point of completely abandoning the project in BC. I believe that one of the biggest reasons that citizens are reluctant to install a smart meter is because of the lack of detailed information provided to customers. The public will be more willing to accept the smart meters if the functions and usage are explained in detail. Also, BC Hydro should allow the public to opt-out of the smart-meter program, or maybe even provide other alternatives, for example Energy Aware’s PowerTab. Until then, it may be “unwise” for Energy Aware to steer clear of British Columbia.

Frederick’s blog

https://www.youtube.com/watch?v=cuMEJxewP-E

The World’s largest coffee shop operator, Starbucks, is looking into expanding its business beyond the coffee sector. Yesterday, Starbucks Corp. announced an agreement to buy tea store chain, Teavana Holdings Inc., for about $620 million. Starbucks is willing to pay Teavana investors $15.50 per share in cash.

Starbucks has already bought the Tazo Tea brand in 1999. Over the years, Tazo Tea sales generate about 1.4 billion per year. With the evidences of Tazo Tea and recent buying of Teavana, there is definitely a popularity trend of tea as a beverage. Tea is the second most consumed beverage in the world. According to Starbuck’s presentation, this $40 billion global market is growing at around 10% per annum. I personally believe that Starbucks’ purchase of Teavana is clearly a great move. This addition not only provides an increase of 1.7% in Starbuck’s annual revenues, it also has the potential to expand rapidly. One opportunity is for Starbucks to expand into China or India for future growth, as reports have shown that both countries have middle classes that drink more tea than coffee. Starbucks could also increase cross selling of Starbucks goods with Teavana, and as a result, boost tea beverage sales in Teavana’s stores across the nation.

http://www.bloomberg.com/news/2012-11-14/starbucks-to-buy-teavana-for-620-million-to-add-tea.html

Selina Ho recently blogged about the privacy concerns regarding the company “Urthecast.” One of the unique aspect of Urthecast is the real-time social layer the company promises to integrate onto their website. This feature allows other users to see the uploader’s location, current activites, and personal information.

I personally agree with Selina on her argument about the privacy issues with the social media proposal. Some people, for example myself, do not feel comfortable with strangers knowing my whereabouts and activities. During the class presentation from Mr. Wade Larson, he personally described his experience of knowing what the person down the block is listening to, or what the man three blocks down has tweeted ten seconds ago. It was a frightening thought. In order to minimize the privacy concerns, Urthecast should allow the users to choose who can see what they post, and know their locations. Instead, the company should approach a similar system as Facebook, where users are given the options to change their whereabouts, or even disable the location option.

Selina’s blog

The country’s fasting growing sector in retailing, the simple dollar stores, are forcing the mainstream competitors, including Wal-Mart Canada Corp. and Canadian Tire Corp., to increase their dollar promotions. Dollar stores have been an ongoing threat for the many years in the industry, but today, they are becoming a bigger force as Canadian market leader Dollarama Inc. is expanding aggressively and U.S. rival Dollar Tree Stores Inc. ramps up its operations here after having scooped up a domestic chain. The dollar stores have been attracting customers with its cheap prices, convenience, and the overall simple style. On the other hand, Canadian Tire and Wal-mart are trying to retaliate by introducing dollar programs, for example Canadian Tire’s “dollar deal”. The big players are hoping that the consumers will come in for a $1 item and at the same time purchasing other, more expensive, products.

The biggest attraction of the “dollar stores” is the low cost products, which on the other hand, the mainstream retailers sells high-quality goods. When Canadian Tire and Wal-Mart begin to match the low costs, they will need to reduce the product quality of the items. Instead of filling the aisles with merchandise with a dollar price tag, Canadian Tire should instead explain to the customers the differences, and let them make the decision of whether to choose quality or cost. For example, Canadian Tire should only provide high end and top notch automotive accessories, instead of providing low quality items. The migration towards the same dollar stores’ style has definitely lowered the product quality at the high-end department stores.

I think it is bad that every retailers are chasing the same consumer. In return, it would only create a boring and homogenous retailing experience for the customers.

http://www.theglobeandmail.com/globe-investor/how-canadas-retailers-discounted-the-rise-of-the-dollar-store/article4596897/

The report of a 3000 to 4000 workers’ strike at Foxconn’s Zhengzhou complex in central China came weeks after Apple’s release of its new iPhone 5 smartphones. Although the report was issued by the New York- based advocacy group China Labor Watch, Foxconn denied the claims and stated that the plant only “suffered two brief and small disputes several days earlier.” There have always been repeatedly tensions between Foxconn and its workers. This time, the workers were angered by over-exacting quality controls as well as demands they work through the week-long National Day holiday. According to China’s official XinHua News, a strike erupted after some 100 quality inspectors at Foxconn refused to work for an hour after workers irate allegedly beat one over the inspection demands. The instruction to strengthen quality inspections was given by Apple itself to reduce costumers’ complaints of flaws in the new phone.

The workers were upset because the quality-control inspectors were rejecting their works due to increasing customer complaints from the West. The stricter inspection policy eventually led to many rejections, and slowly over time, the workers would be getting a lower income because on their “poor” performances. As a result, they erupted beat the inspectors who were rejecting their work. In return, the inspectors went on strike hoping to get protections from the workers’ beatings. The problem with China and Foxconn is that they are keeping their wages and currency too low. China should first improve the standard of its people, giving them education and elevating their living. Controversially from China’s perspective, it needs foreign companies to assemble their products there in order to leverage on their market size to create jobs for its people. Keeping the costs low is the main factor that is attracting international companies to China. Is it possible to find a balance between the two? Should Apple bring these manufacturing jobs back to the US? Is it ethical for Foxconn to suppress and overwork their workers to meet the demand of the West?

The Foxconn’s strike has clearly illustrated that China is going through a transition. The workers are demanding a higher income and a better working condition. China is no longer a paradise of cheap labor and poor working conditions.

http://www.reuters.com/article/2012/10/06/us-apple-foxconn-idUSBRE8941JF20121006

Two major Canadian retailers, Hudson’s Bay Co and Shoppers Drug Mart, have announced that they will be cutting jobs in the next 12 to 18 months to reduce costs due to the “competitive and regulatory changes in the Canadian marketplace.” Hudson Bay is laying off 210 employees in the Toronto area, while Shoppers is cutting 80. To further trim costs, Hudson Bay is moving its information services’ headquarter to St. Louis.

A major reason for Hudson Bay to make such vital decision is largely due to the fact that US retail giant Target Corp. is making its step into the Canadian market. Target has bought up Zellers last year, and is slowly converting most of the previous locations into Targets stores. (Note: Zellers is used to be a division of Hudson Bay) As Zellers chain is being phased out of Canada, Hudson Bay must remodel their structure and adjust their operations in order to survive in today’s competitive market. Shoppers, similarly, had also lost an estimated $750 million last year because of the cut of generic drug prices to 25% of the price of patented drugs- down from 50%.

As Target Corp. slowly gets a hold in the Canadian retailing business, more positions will be cut, and more operations and admin jobs will be transfer down to the US for efficiency. It was not a surprise to see Hudson Bay to lay off jobs once the entire Zellers chain had been shut down. I believe that this is just the beginning for the two corporations. The cuts will definitely be larger in the future as more international competitors enter the Canadian market. It is going to be interesting to see which retailers will survive in the next 10 and 20 years.

http://www.theglobeandmail.com/report-on-business/hudsons-bay-shoppers-drug-mart-cutting-jobs/article4593077/

Northampton is a town in Western Massachusetts. It is home to one of Coca-Cola plant. Recently, this plant has been dumping out excessive wastewater that is becoming too expensive for the Northampton’s wastewater treatment facility to process. The sewage from Coca-Cola is more sugary effluent, meaning that the waste cannot be dumped into the river because it creates high-level of bacteria. As a result, the Northampton’s wastewater treatment system must handle the processing of the waste, but at a higher price for overtime, energy, and the expenses.

A possible solution Northampton is considering is to up the wastewater processing rates by 23%. However far from stepping up to help pay for the added waste treatment, Coca-cola headquarter still haven’t responded to the plan.

This article is definitely an article regarding business ethics. Before the expansion and construction of a new plant, Coca-cola should have foreseen the waste problem. It is not ordinary waste that the company is leaking out, but a waste that could bring potential danger to the citizens of Northampton. What if a worker one day accidentally dump a gallon of waste water into the toilet?  What if a young boy drinks the water when he is down by the lake? Working with communities can not only set a mutual agreement, but also the company can show the citizens its proactive side on water stewardship. Hopefully Coca-Cola will find a win-win situation for itself and the citizens of Northampton.

http://www.triplepundit.com/2012/03/northampton-coca-cola/