All posts by KellyHu

Why is the ARC Initiative Important?

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The Arc Initiative provides a channel for people exchange knowledge and business skills. The program generally focuses on helping relatively impoverished communities, and is very important considering the possible results it can achieve.

I think there are two main reasons Arc functions so well. One is that the program combines two different categories of information. Uwonkunda, an Arc Initiative Sauder student from Rwanda, can demonstrate how this works. She grew up in Rwanda, which means she is familiar with the environment, market, and customer behavior in the place where business is going to start. Combined with her understanding of background information, the knowledge and business skills Arc program provides can become more useful and function to a greater extend. Another reason is that Arc allows ideas to be exchanged between two almost entirely different points of view. People from different backgrounds have unique perspectives of how business can become successful. Ms. Tesfaye’s career is a good illustration of how exchanging perspectives can solve problems. The new perspective she learned at an Arc workshop tells her that a different strategy can be applied to her business, which ultimately solved her problem.

The Arc Initiative program turns out to have helped many businesses, but it can be improved to become even better. Right now the program only builds connection between UBC Sauder students and four impoverished regions, so maybe the Arc program can expand its range. Engaging students from other facilities may help because they might be able to contribute differently than students from UBC do. Also, the Arc program can consider switching the target regions once a while so that more diversified group can receive help.

Response to External Blog post by Tyler Cowen: A Strategy for Rich Countries

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Cowen’s blog post talks about how population is a key factor to boost economy and distribute population evenly will make countries richer. I disagree with Cowen’s opinion for the following reasons.

Cowen assumes all immigrants will start working when they get to a new country therefore increase that country’s working force. His assumption is wrong since not all immigrants work in their new country. For example, many people who emigrate from Asia to North America and Australia only see their new destination as a long-time vacation place. Most of this type of immigrants will not contribute to the working force.

In addition, the immigrants who do work may not satisfy the actual shortage. In North America, there are too few doctors because it takes too much time and tuition to become one. The new immigrants from developing countries for example, will not likely fill this shortage. They might even create unnecessary competition and more unemployment. This will not help the economy because the government needs to provide more assistance.

Moreover, having people immigrate out of an over-populated country might not help its economy. Most people immigrate along with their families, which mean both the working and the non-working ones will leave. Take a look at one country experiences large unemployment population and want less working force. Once working and non-working people leave together, there are still less people needing services therefore unemployment rate will not fall.

In conclusion, Cowen’s blog post does not persuade me because many of his assumptions are questionable.

 

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Response to Yue Huang’s Blogpost: IPO BABA

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Yue mentioned in her blog post that Alibaba, a big e-commerce company in China that recently went public in the New York Stock Exchange, reaches its success through detailed analysis of the market and customer behavior.

I agree with Yue’s idea. Internet shopping has big development potential in China because the size of market. Ali provides simple and cheap way to open up an online shop which attracts many youth, especially new graduates from university who want an easy start in their careers. Yet, in my opinion Alibaba should offer start-up loans to sellers. This way more people can be encouraged to join the sell side.

On the buyer side, more and more people prefer internet shopping nowadays. Alibaba understands what customers really seek: convenience and inexpensiveness. Customers are not restricted by geographical location when they shop online. Also, they don’t need to run around to different shops when they want to compare prices because there are approximately 10 million sellers on Alibaba owned shopping website. Besides providing convenience, Alibaba also provide cheaper goods than physical stores do. There are additional discount such as receive 50% off everything when people shop on November 11. There is only one problem that I spot — some goods are fake. Alibaba should introduce policies that get rid of dishonest seller to ensure the company’s good image.

Moreover, I think Yue’s idea of “entering US market is a strategy the company adopts” is reasonable. Alibaba has already built a functioning and stable market platform, so the only way to expand its business and compete is to enter foreign market. Also, Alibaba need to have IPO because it needs more assets and equity in order to expand further.

 

http://www.economist.com/news/business/21601869-chinas-e-commerce-giant-has-just-revealed-details-its-long-awaited-flotation-america-it

 

Response to Mengjie Wang’s Blog: The Cost of University Textbooks

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The price of most university textbooks has been rising dramatically in the past decades. I do not agree with Mengjie ‘s idea that hardcopy textbooks will possibly be replaced by e-books.

Electronic textbooks are convenient, but people who did not make any purchase can get easier access to e-books than to hardcopy ones. Publishers and authors of textbooks would suffer more potential losses therefore they are not likely going to start offering electronic textbooks.

Another reason electronic textbook may not be able to replace hardcopy textbook is that it is inconvenient to take notes on electronic textbooks. Many students like to write notes on their textbooks but not all of them can afford touchscreen tablets and a regular laptop at the same time. Considering the fact that students can resell their used textbooks back to bookstores, electronic books can become more expensive for some people.

On the other hand, university courses usually require students to buy specific textbooks that contain all the course contents. This creates stable demand for textbooks, which means publishers and authors don’t need to worry if their unreasonable price will drive away customers.

However, publishers and authors should not make the price of their textbook unreasonably high. Their target customer segments are students who most likely pay for textbooks using student loans. Increasing textbook price is unethical, considering the primary purpose of textbooks is to educate people.

 

http://bookstore.ubc.ca/customer-service/faqs/textbook-costs

http://www.cbc.ca/thesundayedition/essays/2014/09/21/textbook-prices-that-break-the-bank/

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Pizza Hut Launches Curry Crust Pizza

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Pizza Hut recently plans to introduce pizza with many new ideas while abandoning some old ones. Trying to catch up with people’s changing tastes, Pizza Hut now provides its customers the option to customize their own pizza. Meanwhile, many of Pizza Hut’s traditional symbols, such as its logo and worker’s uniform, are gone.

It is reasonable to invent new things, but Pizza Hut should not rely on new things only. Many young people certainly prefer novel flavors and even happier to design their own flavors. However, it is also important to enhance traditional flavor in order to retain different customer segments. At the same time, picking employees becomes vital as Pizza Hut introduce new pizza. Employees need to be experts at making all flavors while learn quickly when the company launch new ideas. Once a company expands to a certain level, it starts to ignore small details which might greatly affect its business. The mal-performance of employees at some branch stores can harm Pizza Hut’s overall image.

Moreover, deleting old logo would weaken Pizza Hut’s noticeability. Companies have symbolizing logos to make them stand out among competitors; therefore Pizza Hut should not change nor delete its original logo.

In conclusion, Pizza Hut should only introduce innovative ideas after making sure the traditional ones have best performance.

 

http://www.today.com/money/pizza-hut-launches-curry-crust-pizza-amid-revamp-1D80279139

AT&T buys Mexican Wireless Provider Iusacell

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AT&T, one of America’s largest telecommunications corporations, recently agrees to buy a big cellphone service provider named Iusacell in Mexico. Expansion into foreign markets is a strategy AT&T adopts in order to diversify its customer segments.

AT&T’s decision is correct. South American countries, especially Mexico, have growing tourism industries. In fact, Mexico is the number one popular travel destination for Americans. During international travels, cellphone communication and usage are always too expansive and troublesome. After it purchases Iusacell, AT&T can consider providing cheap and appealing travel packages for the Americans who travel to Mexico. Furthermore, AT&T can even provide special plans for people who go to Mexico more often. For example, these people can make a one-time purchase with AT&T and enjoy long term minimum charges in Mexico. This way, AT&T can create a friendlier and understanding public image, which may attract more American users.

For its business in Mexico, AT&T can also make more profit than Iusacell used to make. Although approximately only six percent of Mexican population uses Iusacell, these users spread across seventy percent of Mexico which makes the company well-known. AT&T would require less effort to start its business in Mexico with the foundation Iusacell built. Comparing to the original Iusacell, AT&T is more trustworthy and efficient. Therefore, the new Iusacell which carries AT&T’s credibility will become more popular among Mexican population.

To sum up, it is smart for AT&T to purchase Iusacell because it can become more successful both in America and in Mexico.

http://dealbook.nytimes.com/2014/11/07/att-to-buy-mexican-wireless-provider-iusacell-for-2-5-billion/?ref=international

First Nation affecting business in Canada

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First Nation people and the Canadian government have been in dispute for years over land issues, but at the same time both are trying to improve their relationship.

Recently, a group of First Nation chiefs urged the Canadian government to reject Site C, a BC Hydro’s hydroelectric mega-project that will cost $8 billion to construct. The project is to build a dam on the Peace River, which will damage farmland, disturb wildlife habitat, and affect First Nation practices.

Due to First Nation people’s intervention, BC Hydro would possibly suffer huge potential loss. I think the company should have planned more carefully on where it builds this project because it is important to understand the macro-environment. The Constitution Act in 1982 gave First Nation people the ownership of massive land properties. Therefore, knowing the fact that Canadian government always has the tendency to appease First Nation people to improve their relationship, BC Hydro should not cause issues between them and the First Nation group. In this case, BC Hydro should not plan a project near First Nation properties without First Nation people’s agreement. However, BC Hydro can try to improve the current situation. For example, the company can alter its original plan to decrease potential harm on the environment. Also, BC Hydro can offer the First Nation community a portion of its profit to make up for the lose it brought to the community. This time, BC Hydro cannot avoid losses but it learns how important it is to examine the macro-environment carefully.

 

 

Article link:

http://www.vancouversun.com/life/Premier+urges+cooperation+more+litigation+government+natives+reach+fork+road/10194776/story.html

http://www.vancouversun.com/news/First+Nation+chiefs+stage+Site+showdown/10215965/story.html

GM recalls more than half a million vehicles

Reputation of a firm among its current and potential customers is extremely important for that firm to earn maximum profit and to beat its competitors.

Recently, GM, the once No.1 automaker in US, has dropped to a rating of 71. This happened due to the fact that GM recalled more than 500,000 vehicles and would stop selling two models lately. These vehicles and models either have existing or potential problems that can possibly cause serious accidents.

What GM has done greatly affected its reputation. According to the article, this recent recall is not the worst one—GM once recalled 2.6 million vehicles after defective ignition switches caused 23 deaths. The company’s multiple recall history creates a sense of distrust among its customers. People will start worrying if the GM vehicle they bought or will buy has similar recall concerns. Therefore, the amount of GM vehicles customers are willing to purchase will experience a drastic decrease and the company will as a result earn less profit. Also, once the car buyers are no longer interested in GM and turn to its competitors, it will take GM lots of effort in the future to try and regain its customer segments.

The most urgent step GM needs to take after fixing the existing problems is try to win its customers back. More advertising is definitely needed, as well as some appropriate promotions.

It is also important in the next step to make sure no further recall situations will happen. The company should pay extra attention to the manufacturing processes and maybe even consider re-examine its production line.

However, although GM has fallen from No.1 to No. 71, it is likely for the company to catch up again and take its place back. In order to achieve such goal, GM must distinguish what are the most urgent and important things to do while leaving less urgent/important ones for later.

 

Article link: http://www.theglobeandmail.com/globe-drive/news/recalls/gm-to-recall-524384-vehicles-for-latch-and-loose-part-issues/article20908713/

 

US jobless rate drops to 6-year low

Unemployment rate always has certain connection to economic growth and decay.  The unemployment rate in the United States dropped to 5.9% in September 2014. This has been the lowest rate ever since 2008.

Decrease in jobless rate is a sign for economic growth. The increment of US dollar index is bringing the country’s economy out of recession into recovery. The better the economy is, the more jobs can be offered to the public, and the better quality the jobs are. The article indicates that more than 240,000 job positions were offered in September, and 30% of them are professional and business services with relatively high-paying.

Due to the assumption that US dollar index will keep increase for a while in the future, it is also reasonable to assume that jobless rate will decrease further more.But, in order to make sure this decrease happens, firms needs to encourage more jobless people to look for and apply for jobs by adjusting wages higher. Right now there are around 100,000 jobless who are not looking for jobs. If firms offer more opportunities while more people are attempting for these opportunities, employment rate will increase even more.

The increase in employment rate means more money can be spent on goods and services, which will ultimately assists in capital cycle and improve the economy.  Therefore, it forms a beneficial cycle which economy will constantly get better.

 

Article link: http://www.cbc.ca/news/business/u-s-jobless-rate-drops-to-6-year-low-of-5-9-1.2786576

 

London’s High Cost of Housing: Possible Solutions

The rise and fall of housing price is always a concerning topic for all. London has become the most expensive city to live and work as its rising housing price exceeds that of Hong Kong.

In the article two possible solutions are listed.

The increase of housing price makes people in London less capable of undertaking the cost of their mortgage or rent, and even less capable of purchasing a property in the city. As a result, many are considering moving out of London. The lost of working population would disturb the regular economic patterns in the city. Therefore, some firms work with local banks and try to offer their employees better mortgage services. I agree with this solution but it can only work as a temporary one. The reason is once too much capital concentrates in one single area, housing in this case, the economy structure can easily collapse if there is any significant changes in that area.

On the other hand, the London First survey indicates that more houses need to be built in order to solve the renting and buying difficulties. But, I do not think that this is a possible solution. Since the housing price is increasing so fast that it exceeds the speed of increase of the entire economy, the price of certain commodities would rise as well. Once the price of commodities such as metal and cement increase, the cost of construction rises. This will then creates a possible increase in housing price, which is not wanted in the current situation.

In my opinion, the government should intervene the housing market to solve the problem.  First of all, it needs to control and lower the housing price. The government can set standard price ranges for different sizes of properties to ensure the capital invested in the housing market does not break the economic balance between different markets. Making the increase rate of housing price parallel to that of the entire market can assist in economic growth. Another thing the government needs to do is to control the factors that stimulate housing price growth. Immigration is one of these factors. Government can limit the number of investment immigrants and let more skilled immigrants in the country. Skilled immigrants will not cause as much housing price increase as investment immigrants do. Setting rules for immigrated population to put limited capital on real estate market can help slowing down the growth rate.

After all, the above opinions are only based on the current status of the housing market, and since the market is so unpredictable, they might not apply in the future. However, testing some possible solutions is the most efficient way to solve the problem.

 

Article link : http://dealbook.nytimes.com/2014/09/26/businesses-raise-alarms-about-londons-high-cost-of-housing/?_php=true&_type=blogs&_php=true&_type=blogs&ref=international&_r=1