In Focus: Innovation and Entrepreneurs

http://www.bloomberg.com/news/2013-10-30/drones-delivering-pizza-venture-capitalists-wager-on-it.html

Picture retrieved from: http://media.salon.com/2012/05/drone1.jpg

The title says it all! Drones that were traditionally used in the military for spying missions is now a possible tool for businesses such as pizza and shopping companies to deliver their products without the need of hiring people to do so. Venture Capitalists such as Tim Draper backs the idea by investing in a start up that develops the necessary software to direct drones into achieving this goal. It has been a while since there was much innovation in the delivery service and this is potentially the next popular move businesses can look forward to in the near future. However, the are several possible issues that this innovation needs to consider. (1) What happens in a malfunction? Will the drone drop from the sky and hit people? (2) How much more efficient is the drone as compared to a delivery truck? (3) How accurate is the GPS guiding system in the drone? Will it deliver the products to the wrong location?

There are of course, many other related concerns that has not been addressed. There are always many threats and uncertainty surrounding start ups. The funding aspect is at least out of the way for those entrepreneurs who received venture capital funding to achieve this goal. It’s still premature to determine the feasibility and success of this innovation but it’s definitely something to keep a look out for in the future.

References:

Commercial Drone Growth: http://ysnews.com/news/2013/09/miami-valley-area-seeks-commercial-drone-growth

Drones grow Nevada Economy?: http://www.vegasinc.com/news/2013/nov/11/will-drones-make-nevadas-economy-soar/

What are drones?: http://dronewars.net/aboutdrone/

In Focus: Business tools, Porter’s Five Forces

Original Blog post by Vivek Thakkar: https://blogs.ubc.ca/vivekthakkar/

Picture retrieved from: http://cdn.gottabemobile.com/wp-content/uploads/2013/11/ATT-Logo.jpg

Vivek raised an important point with regards to porter’s five forces when he mentioned there are a strong barriers to entry in the Canadian telecommunication market. This means that the threat of new entries of telcom companies is low and the existing telcoms in the Canadian market are going to be profitable for a long time.

In a report by OECD, it found that Canadians pay one of the highest prices for one of the worst telecom services in the industrialized world. The entrance of AT&T would have increased competition and in the long run, lower the prices of telecom services in Canada. The suppliers, Bell, Roges, Telus and Wind, face very minimal threats of substitutes as there are not many services out there that can replace them. There is also a high demand for telcom services for day to day usage and hence the telcom companies in Canada seems to have solidified their positions, enjoy high profits and maintain control over the market here.

What all these means is we as consumers, are paying for the inefficiency of telcom services here as they have minimal incentives to improve. I would have definitely loved to see AT&T or other telcom providers enter the market really just for the extra options and improvement of telcom services throughout Canada

References/Updates:

High telco cost: http://rabble.ca/blogs/bloggers/openmediaca/2013/07/confirmed-canadians-pay-some-highest-prices-some-worst-telecom-se

http://www.itworldcanada.com/article/oecd-again-assailed-for-canadian-telecom-ranking/43094

AT&T say no to Canada: http://www.bnn.ca/News/2013/9/17/ATT-looked-at-entering-Canada-nixed-idea.aspx

In Focus: Marketing Strategies

Comments on “Marketing on Facebook: a new thing or an old thing with a new face” from: https://blogs.ubc.ca/haohuahuang/2013/10/02/marketing-on-facebook-a-new-thing-or-an-old-thing-with-a-new-face/

Picture retrieved from:http://strategy.consiliumglobalbusinessadvisors.com/blog/bid/215617/Inbound-Marketing-for-an-I-m-too-busy-world

I agree on Benji’s point on how social media and television channels offer the same value proposition. Over time, the channels of advertising have been constantly evolving and advertisers are always on the lookout for the best and cheapest alternative to get information out into the mass market. However, with the increased accessibility and affordability to advertising, it is now a challenge as people compete for spaces to spread the information they hope to.

There are some signs that television advertising will become less relevant in the future as people turn away from television to online video streaming services such as Netflix and YouTube. These video services offer a wider variety of shows, the ability to choose what consumers want and are relatively cheaper than paid for cable television. As people start to move away from the television to computers, advertising on televisions seems less impactful as it used to be. This is no doubt the reason why we are starting to see increasing amounts of advertisements on our online video streaming services such as YouTube. Apart from social media and online video advertising, I wonder what’s the next big channel for advertising in my time?

References/Interesting reads:

The rise of Netflix: http://singularityhub.com/2011/06/07/the-rise-of-netflix-and-the-future-of-home-entertainment/

The rise of Youtube: http://content.time.com/time/photogallery/0,29307,2019371,00.html

Television less popular: http://blogs.wsj.com/digits/2010/12/13/internet-now-as-popular-as-tv-survey-shows/

In Focus: Marketing

Article retrieved from: http://www.bloomberg.com/news/2013-09-18/solid-new-iphones-fail-to-excite-rich-jaroslovsky.html

Picture retrieved from: (http://www.dvice.com/2013-7-29/mounting-evidence-points-plastic-iphone-5c-apple)

The new IPhone 5s and 5c, attempts to create a point of difference for apple with finger scanning technology, faster processor and an update to their iOS system. Apple is also deviating from their standard model of releasing one IPhone a year to include an extra lower cost model. Apple maintains its points of parity by keeping their phones thin, light and simple to use. These are qualities that Apple has avoided changing since the original IPhone probably because they believe this to be their strength. Apple is an established brand but has not made much changes to their points of parity causing them to lose market share to competitors such as Samsung which has been evolving theirs over the years. Furthermore, Apple’s points of difference such as faster processors and operating system upgrades are not something its competitors are not able to provide. Apple seems to have lost the “wow” factor that they used to provide consumers with when launching new products. The points of difference for smartphones are driven by innovation and Apple needs a lot of it in order to maintain control of the smartphone market.

References:

Iphone 5s/c Sales: http://www.statisticbrain.com/iphone-5-sales-statistics/

IPhone 5s/c Sales analysis: http://www.taipeitimes.com/News/biz/archives/2013/10/30/2003575703

IPhone 5s review: http://www.techradar.com/reviews/phones/mobile-phones/iphone-5s-1179315/review

In Focus: Financial Accounting

Article retrieved from: http://www.cbc.ca/news/business/twitter-ipo-details-raise-questions-over-financials-bots-1.1912936

Picture retrieved from: (http://cdn0.fiverrcdn.com/photos/572524/medium/twitter.jpg?1327145997)

#twitter#IPO#hashtags#investment#risk

Twitter is about to go through with its Initial Public Offering (IPO) to raise capital for the company. This is a risky investment considering that the company has only been making losses to date, their current debt stands at $418.6 million. The plus side of this IPO is that Twitter managed to triple their revenue to $316.9 million in 2012 and have a large data base of users. In a Financial accounting perspective, there is a possibility that the revenues could be overstated and debts understated to convince investors to purchase their shares. Twitter might have also deferred some debts over the next few years which are not reported but are still part of the losses they incurred.  In addition, considering that the amount of debt it has, they have limited amounts of free cash flow that can be used to grow the business. Twitter currently relies on credit from banks and private investors and if this IPO is not successful in raising enough capital for the company, they might continue to make losses. Investors should exercise caution before buying twitter shares.

Update/Further/Interesting readings:

Sceptical Investors: http://news.yahoo.com/ap-cnbc-poll-twitter-faces-skeptical-investors-051700470–finance.html

Wall Street Brokers push up twitter IPO targets: http://www.reuters.com/article/2013/11/01/us-twitter-ipo-analysts-idUSBRE9A010720131101

Twitter Indicators for stock market analysis: http://www.downsidehedge.com/twitter-indicators/

In Focus: Business tools, Business Canvas

Article retrieved from: (http://www.theglobeandmail.com/report-on-business/small-business/sb-money/business-funding/sap-commits-650-million-to-venture-capital-fund/article14656965)

Picture retrieved from (http://international.iteem.ec-lille.fr/north-america/sap-a-useful-tool-for-companies%E2%80%A6/)

Venture capital is investing money into new or expanding businesses that has the potential for further growth. SAP’s commitment to venture capital signals a shift in their business plan, in particular their revenue streams and key partnerships. Research and development operations are typically expensive and sometimes can be unyielding. The $ 650 million fund will attract potential entrepreneurs to partner with SAP who is able to provide them with expertise, distribution channels, marketing and etcetera to grow their business. They are also expanding their key resources since they have a share in the assets of the companies they buy equity in. When these businesses become profitable and expand to a sizeable scale, SAP can sell their stake in the company for a significant amount which contributes to their revenue stream. SAP is also potentially attracting entrepreneurs that have businesses overseas and buying into these starts ups will expand their operations abroad which opens new opportunities and revenue streams from other countries. The right investments will potentially reduce their research and development cost since these starts ups are introducing new ideas into the market for SAP and they do not need to fund research projects or hire people to do so.

References:

SAP gloomy software trend: http://www.reuters.com/article/2013/10/21/us-sap-results-idUSBRE99K02I20131021

SAP expands partner program: http://www.pcworld.com/article/2045510/sap-expands-partner-program-for-application-development.html