Kristoffer Lien's Blog

In 2018, the FIFA World Cup will again return to Europe. ‘Belgium and the Netherlands’, ‘Portugal and Spain’, England and Russia all submitted bids to FIFA to host the Championship. Europe is home to some of the best national teams in the world, featuring the current World Cup and European Championship holder, Spain, and the self-proclaimed founders of soccer – England, who have not hosted the World Cup since 1966. Moreover, Spain, Portugal, The Netherlands and England are all ranked among the 8 top teams in the world, whereas first place holder Spain (As of Dec. 2nd, (http://www.fifa.com/worldfootball/ranking/lastranking/gender=m/fullranking.html). These teams are home to the worlds best soccer leagues, with long soccer traditions and state of the art venues.

Despite of this, Russia won the bid to host the World Cup in 2018. When analyzing why, one must think of FIFA’s intentions when awarding a country the privilege of hosting the world cup. Clearly, they have not chosen Russia due to their superior venues and their soccer traditions. FIFA’s goal is to make soccer the most popular sport in the world. They do this by giving the championship to countries in regions were soccer is not popular. This thesis is supported by the 2010 World Cup, which was given to South Africa. This was the first time an African nation was permitted to host the championship.

Grønt Norge (Green Norway) is an exciting company that promotes environmentally friendly products. The company is Norwegian, and was founded by two high school graduates in 2009. The two entrepreneurs were on a vacation in Dubai when they discovered that their iPhones kept running out of batteries. They then came up with the idea of creating a mobile phone cover with solar panels, enabling the iPhone to become self-sufficient with power.

The company is extremely successful, and recently signed a 5 million CAD contract with Aurora Group. This vast and rapid wealth creation, together with its high degree of innovation, makes the company an excellent example of an entrepreneurial business.

Yesterday, USA Today publishes a story about American Eagle Outfitters, and their new approach to target college students at West Virginia University (http://www.usatoday.com/money/advertising/2010-10-03-marketing-to-college-students_N.htm). American Eagle are targeting college students through facebook, twitter and organizations representatives working on campus. Moreover, they help students move into college dorms and give away free flip flops and coupons.

This does appear to be a very efficient and profit-making strategy from American Eagle. As the article states, college students “have money to spend (often courtesy of mom and dad)”, they’re accustomed to getting what they want and they might continue to buy the same brands (given that they are satisfied with them) after college, when they are likely to have more money to spend.

This marketing strategy is obviously not only used by American Eagle. Other brans that receive much of their profits from college students are also heavily engaged on campus, such as Apple, Red Bull and car brands. It is reasonable to assume that this market strategy will generate a substantial profit, both in the short run and the long run due to the aforementioned factors.

Earlier today, The Daily Mail stated that the banks in Britain are still in need of the taxpayer’s money in order to stay in business (http://www.dailymail.co.uk/news/article-1317396/Banks-need-cash-taxpayers-government-aid-ends-year.html). This is shown by a new report titled “Where Did Our Money Go?”

During the financial crisis, the government decided to give monetary aid to the banks, as they were afraid that if the largest banks went bankrupt, this could bring down the entire banking system. Now, the government has decided to stop giving the banks money, which is problematic for the banks.

Many have criticized the way the government acted during the financial crisis. By aiding the largest banks, the government rewarded the banks that took the largest risks. Essentially, the largest banks “know” that the government will not allow them to go bankrupt, so they can have a policy in which they take large risks and either receive high returns on their investment or their investments go bad, and they will be saved by the taxpayers. By implementing this mindset on the chairmen of the banks, the government is ruining the competitive banking market. The larger banks are favoured, and the smaller banks and the taxpayers lose.

In conclusion, it is important for the government to keep the largest banks alive in order to keep the banking system working. However, the banks must not make it seem as they will always help the major banks. They must therefore be very cautious and strict when giving monetary aid.

Today, the Guardian has announced that the staff of the London underground is to begin a 24 hour strike (http://www.guardian.co.uk/uk/2010/oct/03/london-underground-workers-tube-strike). The general secretary of the National Union of Rail, Maritime and Transport Workers (RMT), Bob Crow, states that they are going on strike because managers are planning on using under-trained staff.

In my opinion, it is fully justifiable for the RMT to go on strike, especially since this information was transferred to RMT as a leak, and not as a public announcement. The Tube managers are threatening the commuters just as much, if not more, than they are threatening the RMT staff. Employing under-trained workers may have fatal consequences in the case of an emergency as it may lead to more casualties and deaths. Especially with the July 7th 2005 terrorist attack on the British mass transit system fresh in mind, it is vital that the staff is adequately trained.

On the other hand, basing a strike on information that has been leaked is a weak reasoning as it is difficult to falsify. One may become tempted to believe that this is just a bad excuse for wanting more money from the government. If so, the action is highly unethical, especially since it affects so many commuters that are not to blame for any difficulties. It all comes down to the investigation/negotiations that will follow.

The Globe and Mail Commentator Barrie McKenna claims that the “Gap Between Rich and Poor Won’t Be Closing Anytime soon.” http://www.theglobeandmail.com/report-on-business/commentary/barrie-mckenna/gap-between-rich-and-poor-wont-be-closing-any-time-soon/article174023

Though the statement in itself is likely to be true, the article appears to be highly biased and be heavily influenced by left-wing political undertones. The commentary uses data from a study conducted by Dr Michael Norton and Dr. Dan Ariely. They set up three basic pie chart models for how wealth was distributed in a country, where one model portrayed perfect equality, one Sweden’s equality and one the Us’s equality. 92% of Americans chose the Swedish model as their optimal level of equality, which Mr. McKenna uses as a premise to create a biased and flawed argument. He claims that the research shows that the Americans regret that they have chosen to make use of a capitalist policy, and that Canadians should therefore be careful not to make the same mistake as their southern neighbours.

As we know, politics is all about prioritizing how we want the government to act based on the values and beliefs we have. Therefore, the data shown in the research does not convert to politics as easily as McKenna makes it look. Most people want equality at some level, but where people differ is how important it is to them.

Earlier today (Wednesday September 15th), Bloomberg announced that Shell has started extracting oil from the vast amounts of oil sand located in Alberta, Canada. (http://www.bloomberg.com/news/2010-09-15/shell-starts-output-at-canadian-oil-sand-expansion-update1-.html) As the Canadian oil sand equates to the seconds largest concentration of crude oil in the world, many notable players in the oil industry have been attracted to the “black gold” reserves, including Hydro, Statoil, BP and Exxon Mobil.

Environmentalists and aboriginals are furious with the developments – and with good reason. Scientists claim that in 2025, between 1.6-2.3 billion cubic feet of natural gas will be required each day to extract the projected amounts of oil sand (1/5 of daily Canadian gas production) (http://www.energybulletin.net/53455). Moreover, the extraction, refinement and consumption of the oil will lead to massive amounts of Greenhouse Gases, in a time where more and more countries are agreeing to limit their GHG emissions. (http://www.mapleleafweb.com/features/alberta-s-oil-sands-key-issues-and-impacts#environmental)

Finally, the involvement of the oil companies is likely to significantly harm the nature and ecosystem due to the way the oil is extracted, making beautiful scenery

turn into THIS!

The question one must ask is: is it justifiable for firms to threaten the environment, ecosystem and nature in order to maximise profits?