Mark Guo's Blog

British Gas is having a huge makeover due to a “loss of trust” by their customers. They are giving customers the choice to choose from two types of tariff for their bill so people can reduce their payments. They decided for this reform due to a recent assessment of the British energy industry, which claimed that they are making excess profit they shouldn’t be. British Gas wants to fix this problem since their company values social responsibility.

When we talked about business ethics, I preferred Freeman’s ideal over Friedman’s. Friedman’s idea of a business simply wouldn’t work as well in today’s world because people seek equality and rights. A company based on Freeman’s ideals will do better in the long term. However in the case of British Gas, I personally believe this is more of a marketing scheme and an image makeover than truly wanting the better for their customers. The difference offered between the two tariffs is probably small, not to mention tariffs are a form of tax given to the government. So British Gas is simply making the customers pay a little less tax and they pay a bit more, overall they lose very little.

Microsoft is the most famous software manufacturer in the world. Founded by Bill Gates and Paul Allen back in 1975, it developed operating systems and programs for PC that was available for the masses. In recent years they started to develop hardware electronics such as cellphones and computer accessories, as well as entering the gaming industry with the Xbox.

Based on the reading, Microsoft is one of the most successful entrepreneurial ventures in the world. The speed and amount of wealth obtained by Microsoft is absolutely stunning, and it made Bill Gates the richest man in the world for quite a while. In terms of risks, Microsoft was established when computers simply aren’t accessible or necessary in the common household. They were heading into an unknown market. Microsoft was extremely innovative when it introduced Windows 95, and it revolutionized how computers are ran. However in recent years many people criticized Microsoft’s innovation by claiming that they are simply coping what others are making, except making it better. For example, the newest version of Windows, the 7 had many clear similarities to Apple’s operating system. However this will not stop Microsoft from the success it has been having, and it will continue to dominate the technology industry.

The highly controversial decision by Netflix in which customers have to manage two separate accounts and pay separably for streaming movies and physical DVDs ended today.

Qwikster will be abandoned by Netflix and they will go back to their original service, delivering both types of movie watching under one price. This was a failed strategy by Netflix, they shouldn’t have done this in the first place. If they had considered the basic principles of economics they should have known that people consider at the margin. Consumers will not appreciate the new and pricier service provided. As we have talked in class, this experiment by Netflix ended in a failure, and clearly they did not earn any profit. Their opportunity cost was too high, to sacrifice their loyal customers for a few more dollars on the new ones. A new long term strategy is a double edged sword, if implemented correctly a business could flourish, but wrongly the exact opposite will happen. Netflix implemented the wrong strategy at the wrong time, and it costed them greatly.

Good thing they were able to recover quickly, or else they would have ended up like Blockbuster – down the drain.

Seems like Europe’s stock market is heading towards the right direction.

The German and French leaders reported on Sunday that their governments will support Europe’s banks by providing “an adequate capital”. As a result the European stock market rose by 3%. However many are still worried about the effectiveness of this action, as Greece still owes money that they will need a bailout for. Many economists have argued that the best way for the economy to improve is for the government to stop intervening, but I don’t think that will work. People trust in their governments (usually) and believe whatever they are doing is correct. Despite the recent protests about the “1%” over the world, if governments stop intervening in the economics of a country, I guarantee that people will eventually feel insecure about their country financially and protest again to have them back.

Humans need shelters to feel safe, and the government is that shelter for society. It doesn’t matter if the shelter is broken or artificial, the majority of the society will not question the shelter because they feel comfortable under it. Europe should definitely make some renovation for their houses though.

Once the largest cellphone producer in the entire world, Nokia is ready to cut down 3500 jobs. They are closing down the Romania factory they opened 4 years ago to cut down 2200 jobs, along with 1300 more at its commerce business sector.

Nokia is going over a huge reconstruction right now, and job cuts are necessary if the company wants to stay competitive with Apple and Samsung. Personally I am a huge fan of Nokia. Their phones are intellegent, durable and reliable. However since the introduction of the iPhone, their traditional keypad cellphones waned and began to decline. They did not have a good business technology management and lacked behind their competitors in the touchscreen market. Just like Kodak, they did not catch on to the rest of the industry.

Right now Nokia is thinking of cooperating with Microsoft and their Windows Mobile operating system, which is a good idea for them. This way Nokia only needs to focus on the hardware side (which they are good at), and leave the systems to Microsoft (who is always “trendy” in technology). The electronics industry is a fast and ferocious battlefield, Nokia and Kodak are victims of bad business technology management.

Seems like the Iphone 4S will do just fine after all.

The recent annoucement of the iPhone 4S was a huge disappointment for many. Many expected the newly designed iPhone5 to be announced at Apple’s press event, instead they got a faster version of the current iPhone4. However Steve Jobs’ death will perpetrate the sales because people will buy it to commoderate his life and work. Businesses often take advantage of opportunities when a famous or important figure dies. When Michael Jackson died, it was estimated that he earned up to $1 billion in revenue for his posthumous work the following year.

As a business student, it’s important to understand consumer behavior. A lot of people believe that by buying sentiment related products they are showing respect by keeping a memento. It may be unethical for some, but opportunities like this don’t come very often and businesses should utilize them. However this will not work for everyone, a strong “brand” positioning is needed in order for consumers to consider them worthy of being remembered. Brand positioning does not necessarily have to be actual products and services. Both Jobs and Jackson were global icons in their respective fields, thus having a strong “brand”.

Wal-Mart, a global icon and arguably the largest retailer chain in our current world is setting an example for other corporations.

Recently during the Sustainability Summit held by Wal-Mart in Brazil, the retailing giant announced that their supply chains are forbidden to have slave labor, soybeans from illegal deforested areas, and meat from newly cleared Amazonian land. Not only did they sign the agreement, they also invited 20 other global corporations such as PepsiCo, Johnson&Johnson and P&G to sign it as well. Wal-Mart does not have the greatest of reputation among corporations.

People assume they are one those “evil” corporations that only cares about profit and nothing else. However they demonstrated great interest and effort in trying to establish itself as one of the “better” businesses. This Summit will show people that their business is not simply about making money, but also trying to change the practices and methods that ruin the reputation of the business world. Walmart set an example for other retail chains who are sure to follow behind their footsteps.