Month: November 2013

I was intrigued by the blog post I found in the New York Times’s website. It is based on the Founder Institute, a school were students have to graduate with a new company idea. The graduates then attempt to start up this business. Only 10% of these businesses failed and 15 went dormant. The other 75% are currently moving forward.

The tuition for this institute is not only a fixed cost, but also a variable cost. This is because the students that attend have to pay to for the classes and additionally they have to give up 3.5% of their companies to the institute.

Several students that graduated from the institute were interviewed by the New York Times. Even though not all of the students were able to make profits out of their companies, they all agreed that they learn how to start a business. However, is this knowledge obtained from the course worth giving 3.5% of the company you created? This question obtained interesting responses since the students did not agree.
In general this institute may offer high quality classes, but the cost of attending may be a concern for many due to the variable cost included.

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While reading Maria Pous’s blog post, I realized how sports can turn into businesses. The blog post talks about how the sport of ultimate frisbee is becoming a business. This demonstrated how even sports that are not as popular can result as a business opportunity. The sport is being professionalized by tournaments being broadcasted by ESPN, which can turn out very lucrative for the ultimate teams.

As well, small companies have taken this rise in the sport to their advantage. For instance, the developers of the smartphone application ‘Ultiapp’ earned profits by creating an application for ultimate players to be coached and allows them to monitor their performance.

The sport of ultimate frisbee is increasing in popularity and profitability. With the increase in popularity there is a greater business opportunity for businesses to join this market and gain profits. Entrepreneurs may see this as a good opportunity for them to join an upcoming market and make a lucrative investment in this sport.

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In Jake Black’s blog post, he explains how recently the German automobile company, Volkswagen, decided to stop the production of its renowned van, the Kombi. Even though this model was success for around half a century, it recently lost popularity. This model was still being sold for historic purposes, but Volkswagen decided that this operation was not profitable for the business.

Furthermore, he analyzes how the accounting costs for maintaining the production of the Kombi outweighed the benefits obtained from it. This is the main reason why Volkswagen ended the production of this ubiquitous van. The opportunity cost from keeping the production was too high, since with the money spent in this product, the company could invest in an innovative automobile. By doing this, the German automaker would likely attract a wider audience than the one that the Kombi has currently.

Ultimately, Volkswagen’s decision to discontinue the Kombi is forward-looking since it may allow the company to spend the money in innovation. Moreover, by doing this the company would be able to keep competing with the rest of the firms in the industry.

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The Japanese multinational company, Sony, released on the 15th of november its new video gaming console, the Play Station 4 (PS4). PS4 is the first console that the Japanese company releases in seven years. This is a big event for Sony since it demonstrates product innovation and how with this product the company will compete against Microsoft’s upcoming console, Xbox One.

One of PS4’s point of difference is that it offers an affordable price to customers. The console costs only $399 compared to the price of its competitor, $499. This is likely to attract a variety of customers.

Currently, Sony has been facing severe issues, one of them being that the financial forecasts of the company’s profits are now predicted to be 40% less than the initial prediction. This lead the company’s stock value to drop by 11%. Yet, the company’s shares are still 60% higher than previous year mostly because of the huge anticipation to the innovative play station 4.

Overall, Sony is expecting to sell 5 million PS4s by march. This should allow the company to increase its profits and help the company to improve its financial issues.

Article link: http://money.cnn.com/2013/11/15/technology/sony-playstation-4/index.html?iid=HP_River

Image link: http://cms.interaksyon.com/infotech/assets/2013/08/PlayStation4.jpg

The third largest U.S. business magazine, Forbes, is exploring the option of being sold. Forbes’ profits have fallen by 7.5 % in the past 9 months. To explore its selling options, the company hired Deutsche bank.

President and CEO of Forbes, Mike Perlis, sent a letter to the employees communicating them that the company is in fact exploring the option of being sold and that is move is “more than a few over the transom indications of interest”. This may have caused worry amongst employees since with a change of owner, often leads to changes in the organizational culture and even the employees that work for the company.

Forbes is not the only printed media company that is considering being sold. Major newspapers such as Boston Globe and the Washington Post, as well as several magazines have recently been sold. The main cause for this is that the print media industry in general has faced a severe downfall in demand due to increased popularity of online media. As a consequence, the amount of advertisement displayed in print media has decreased since some of the advertising companies rather promote their products in online media.

Article: http://money.cnn.com/2013/11/15/news/companies/forbes-sale/

The demand for wine has increased steadily since 1996. However, the production

of wine has decreased by 25% since 2004. In 2012, the demand for wine was 300 million cases greater than the quantity produced. This represents a shortage in wine, which has been classified by the American researcher Morgan Stanley as wine’s “deepest shortfall in over 40 years of record”. Likewise, production last year dropped to its lowest in four decades. Due to this decrease in production, the prices for wine exports are expected to increase.

The cause of this drop in production of wine is most likely to be the poor weather conditions affecting Europe, where the greatest quantity of wine is produced. This made wine production to drop by 10% last year. Yet, the production in countries such as the United States, Australia, Argentina, China and South Africa has increased for the past few years. In total there are more than one million wine producers around the world.

Despite decreases in wine production in Europe, France is the largest consumer of wine, consuming 12% of th

e world’s wine. The country that consumed the second greatest amount of wine is United States followed by Italy and China. Overall, the wine suppliers should aim to increase the supply in areas not affected to be able to maintain the production and consumption of wine in these countries and in the world.

Article: http://www.bbc.co.uk/news/world-24746539