Matteo Stefan's Blog

Everyone knows throwing money at a problem only hides it. We have to understand the problem to create a sustainable long-term solution.

The UN unfortunately, is not the wisest spender of funds. Even if fully funded, it will never be able to properly solve the issues it sets out to cure.

The UN is an international organization, but it does not understand every problem in the world. When the UN sends aid, it sends materials and expertise, but it does not have local knowledge to efficiently utilize the aid.

That is where social entrepreneurs who have extensive knowledge of the troubled area come into play. They know how to wisely use the resources provided and create long-term business ventures and shared value; benefiting both the business and the people.

When there is an absence of social entrepreneurs, programs like Arc can provide insight by having UN members with the resources and expertise work with locals with understanding of the region and roots of the issues to work together to exchange ideas and information. Smarter and more appropriate solutions can be created, and the enriched locals can make sure the solutions keep on working once the UN leaves.

Starbucks has announced a long term commitment that will ensure that all of its espresso based drinks in its 700 British and Irish stores will be made from beans grown by farmers who are part of the Fairtrade agreement. This announcement was made in an attempt to reverse a sales slump that has recently hit the companies’ Global expansion.

According to the Fairtrade Foundation, a London-based organization that promotes safe trading conditions, higher social and environmental standards, sustainability and higher payment to exporters, 100,000 farmers will benefit from the promise.

As mentioned in the article written by Martin Hickman, members of Fairtrade receive a guaranteed rate of $1.25 per lb of green beans, plus a “social Premium” of 10 US cents per Ib towards community projects. Currently, 6% of Starbucks’ coffee sales around the world are certified as Fairtrade. However, with its newly announced commitment it would become the largest buyer of Fairtrade coffee in the world, thus doubling its global purchases to 40 million.

This commitment would create shared value because it would not only refresh sales throughout the UK which have been drastically hit by competition from new, rival chains, but it would benefit society by enforcing and creating sustainable development. Fairtrading will shorten trade chains so that producers will receive more from the final selling price of their goods. In addition to the improvement in pay, producers will also receive a social premium, which will go towards building infrastructures such as schools and hospitals and thus increase economic development. As well, Fairtrade will assist producer organizations to understand more about market conditions, which in turn will allow them develop knowledge and skills that will enable them to exercise more control over their lives. Finally, Fairtrade terms offered by buyers takes into account all costs of production, specifically the safeguarding of natural resources and thus sustaining future investment needs, ex maintaining sustainable livelihood.

As you can see, this commitment will benefit producers in tremendously positive ways. However, how would this in turn refresh sales in the dwindling UK market you may ask? Simple! It will not only give consumers the assurance that the coffee they are purchasing is produced and purchased safely and ethically but it will provide them with the comfort that every cup they consume is creating financial and social stability for the people who need it most. It’s common knowledge that people will ‘help where they can’. If they are able to do so without it taking a financial hit on their everyday lives the urge is greater. Making consumers aware of the Fairtrade agreement Starbucks’ is set to embark on will surely set the company apart from its competitors and will therefore provide the boost in sales they’ve been yearning for. – Shared Value at its finest!

Source:http://www.independent.co.uk/life-style/food-and-drink/news/all-starbucks-coffee-to-be-fairtrade-1035162.html

In this captivating external blog, Martin Zwilling reveals what he believes are the top 10 things young entrepreneurs should avoid when starting up a company. As a man who advises many start-ups, he often sees many entrepreneurs preferring to “fail their way to the top.” By this, he expresses that young entrepreneurs often prefer to fail fast and often, rather than doing some extensive research in order to determine what has worked in the past for previous entrepreneurs and their start-ups. Spending money you don’t have in the bank, rapid growth without a plan, verbal business agreements and creating a market you can’t supply and support, are just a few of young entrepreneurs major flaws that Marty mentions. Marty often tries to emphasize these major issues that don’t work and are doom for failure.

As a young business student hoping to one day start my own business, I found this blog to be very eye-opening and helpful. It is interesting to see where so many entrepreneurs have gone wrong when introducing a new business into the market. Similarly, in comm 101 we have talked about what it takes for a start-up to be successful. Much like what we have learned, Marty continues to reiterate the importance of work ethic and due diligence. Furthermore, he mentions the importance of a unique disruptive product and how the success of a start-up relies heavily on introducing a product that is truly new and disruptive.

However, throughout comm 101 we have seen examples of companies who sometimes struggle to achieve these simple steps. Tesla for example, is an extremely successful new disruptive innovator however; at times Tesla has struggled to meet the high demand for their cars. Tesla has been prone to late deliveries, which has in turn affected their company reputation. As you can see, sometimes success isn’t as simple as ten steps. Even some of the most successful companies struggle at times to operate a business at maximum efficiency. Sometimes failure is necessary in order for businesses to learn from their mistakes. To sum things up, a part of me feels as though failing your way to the top could potentially be beneficial. The most successful people in the world have all dealt with failure and rejection. In the end, it makes a person stronger and better suited for greater accomplishments.

Source: http://blog.startupprofessionals.com/

“When Calgary-based AltaGas Ltd. started work on a $725-million run-of-river power development 380 kilometres northwest of Terrace, it was a practical move to enlist the Tahltan Nation Development Corp. as a partner on the project. “

More often than not, we see First Nations as being an obstacle for business to overcome, in order to proceed with their daily economic development. However, in this particular case, we see a mutual beneficial partnership between AltaGas Ltd. and the Tahltan Nation Development Corp. Contrary to what many people may think was simply an agreement in order to satisfy the Tahltan peoples aboriginal rights, Tahltan Nation Development offered a wide range of services that benefited AltaGas, such as a ready- made workforce at the remote location of the project, and expertise in the surrounding environment. Furthermore, Tahltan Nation development was very helpful in operating heavy machinery, road maintenance, and camp facilities.

This partnership between AltaGas Ltd. and Tahltan Nation Development Corp. should serve as economic precedence to future business endeavours. As you can see, First Nations have plenty to offer in terms of expertise, work ethic, and skills. I feel as though businesses and First nations should make a greater effort in working together, rather than working against one another. If so, both entities could benefit substantially. Businesses could provide employment for the aboriginal individuals or companies, and the First Nations bring the aspect of expertise and positive social impact. Aboriginal title to land will prevent companies from over exploiting the environment. However, mutual partnerships could allow businesses to exploit certain aspects of the land, while also creating shared value. The aspect of social value and shareholder value, which is a key value proposition of Tahltan Development, will lead to both economic growth and the preservation of ecosystems. In the end, if they could work together as one, Aboriginals and businesses could seek alternatives that would benefit both parties, thus ending the continuous disputes.

Source:http://www.vancouversun.com/business/First+Nations+Tahltan+AltaGas+partnership/10236269/story.html

This article is in response to Danny Jung’s article “Lenovo + Blackberry.” Danny talks about Lenovo’s interest in buying out Blackberry, revealing that Lenovo is willing to bid $15 a share for the Canadian company’s stock. He feels as though the sale of blackberry would be a very smart move by blackberry’s C.E.O thus, Lenovo has already established themselves as a successful competitor in the mobile and desktop device industry. He believes the company would sell more Blackberry products than ever before and Blackberry’s reputation would in turn rise for the better.

Personally, I could not agree more with what Danny has mentioned in this article response. Similarly, I feel as though the sale of blackberry is a no brainer. At this point in time, Blackberry has lost the majority of its monetary value. Six years ago Blackberry’s stock peaked at just over $140 /share. Currently, Blackberry’s stock price is trading at roughly $10.50/share. The best thing the CEO can do now is simply sell the company for parts. Unfortunately, Blackberry does not appear to be rebounding anytime soon. The company has lost a huge amount of its former market share, as it struggles to keep up with the industry leaders; Apple and Microsoft. If Blackberry doesn’t want to die a slow and painful death, they should make the sale to Lenovo. Lenovo could potentially enhance blackberry’s current technology and therefore increase the sale of Blackberry products, thus keeping Blackberry products on the market.

On a side note, one thing to keep in mind is that nearly 600,000 Blackberry smartphones are currently owned and issued by the U.S national defense department. Not to mention, Barack Obama, the president of the United States is also an active Blackberry user. There is no doubt that sale of Blackberry to a foreign entity would need to overcome tremendous barriers as the Canadian government ultimately must determine whether or not the sale is beneficial to Canada’s economy, and whether or not it is a risk to national security. When it’s all said and done, Lenovo’s acquisition of Blackberry could be a very difficult one, and there’s much reason to believe that Lenovo will be forced to pay a premium if they wish to have any hope in acquiring the Canadian smartphone company.

Source of article:  https://blogs.ubc.ca/djung/2014/11/04/lenovoblackberry/

“Charmin, America’s most popular toilet paper brand for more than 25 years, is launching new Charmin plus the scent of Chamomile.”

If you thought toilet paper couldn’t get any better, wait till you see this. On August 4^th 2014, Charmin announced that it is launching a Chamomile scented toilet paper. According to management, the scent of chamomile will create a “bathroom experience that soothes all the senses” and will enable its customers to kick back and relax while using the restroom. The idea came about when external marketing research revealed that many consumers across America have been seeking a scented product of Toilet paper. It is no surprise that Charmin are the first ones to introduce the product to the market, as they have always prided themselves in sharing a direct relationship with their customers in order to satisfy their customers’ needs and desires. Exceptional customer satisfaction has been such a key segment to the Toilet paper Company’s success, and is ultimately a big part of why Charmin has been so successful for so long. This marks yet another key value proposition offered by the industry leader, to go along side its “strong but soft” Toilet paper brand image.

Furthermore, Charmin continues to revolutionize the toilet paper industry. Its strong value propositions and reputation of exceptional customer satisfaction, have played keys roles in defining Charmin’s strategy of differentiation.

In my opinion, the scented toilet paper is genius in the short- run however; over-time the constant smell of Chamomile could potentially get slightly repulsive. I agree that, in the beginning, chamomile scented toilet paper will be quite nice and relaxing. However, as you continue to make more and more trips to the restroom, the smell may become slightly distasteful. It is like eating cake. The first few bites are amazing, and during that period of time there is nothing better in the world. But as you continue to consume more and more cake, eventually you are going to feel a slight urge to vomit. Much of like anything in life, excessive amounts of one thing will eventually cause you to get sick of it. I believe that if Charmin diversifies their scented toilet paper to more than simply chamomile, than the consumer desire to continuing purchasing scented toilet paper will never wither away.

Source of article:http://www.marketwatch.com/story/charmin-introduces-chamomile-scented-toilet-paper-2014-08-04

As automotive innovation continues to flood U.S markets, a new unsung hero is preparing to expand its unique and successful SUV and cross over models to U.S markets. SsangYong,one of Korea’s largest automakers, is aiming to attack U.S markets with its unparalleled affordable prices, marking yet more competition for local American auto companies Ford, GM and Chrysler. This disruptive innovator is set to introduce a seven seated SUV model at roughly $17,000. This low-priced substitute could potentially take substantial market share away from local SUV manufactures, as current existing options are nowhere near this price, nor do they offer this seven seated option. SsangYong could be the first of many discount vehicles to enter the American market as companies such as Tata, Proton, and others wait to see the impact and success of the Korean based Car Company. Although SsangYong’s potential for success in U.S markets is colossal, currently the company’s management team is mapping out a floor plan based on the company’s strategy moving forward. In my opinion, American auto manufacturers have been consistently wreaking the benefit of selling inflated cars to consumers while perceiving many buyers as though they are purchasing the vehicle at a fair price. However as of late, the emergence of foreign auto manufacturers in the auto industry has hindered the ability of domestic auto manufacturers to compete with the ways in which foreign entities are able to produce and sell vehicles for a fraction of the cost. The introduction of these budget cars could simply add to the interesting dynamic that has been surfacing in the U.S automotive industry as of late. Ultimately, when it boils down to it, altered business models will be necessary for domestic manufacturers if they wish to survive the ever-changing innovative auto industry.

Source: http://www.digitaltrends.com/cars/invasion-budget-korean-automaker-ssangyong-may-enter-us-market/

This blog is in response to a fellow classmate and friend of mine, Mitchell McCullough. Mitch talks about a newly introduced online streaming service “Shomi.” The platform was created by Rogers and Bell in hopes of competing against Netflix and ultimately taking substantial market share away from the dominant industry leader. Mitchell believes that the company lacks differentiation from Netflix and therefore exhibits a weak business strategy. He also adds that Shomi is by no means disruptive, as it offers very similar content at a higher price.

Personally, I believe Mitchell brings forth some very key points. If Bell and Rogers expect to simply roll into the market and take-over the vast majority of the market share, their strongly mistaken. Netflix has existed for many years, and they have virtually monopolized the industry. It is going to take more than simply a replica platform to over-take their current position. Similarly to what Mitch mentioned, over-time Netflix will lose a few current users as some viewers switch over to Shomi in attempts to try something new. However, I don’t believe Shomi will make too great of an impact. Shomi gives consumers no reason to make the switch, as they offer no incentive to consumers thus they lack differentiation.

Source: https://blogs.ubc.ca/mitchmccullough/2014/11/04/shomi-is-it-a-netflix-killer/

One of the most fascinating stories to recently begin trending throughout the media is associated with one of the largest hotel chains in North America. This past week, Marriott International was fined $600,000 for blocking conference attendees and exhibitors personal Wi-Fi connection. The fine came after a lengthy investigation by the Federal Communications Commission (FCC) who was given a tip by a guest at the Opryland Hotel in Nashville, Tennessee. The guest complained that the hotel was “jamming devices in its function room” (The Independent, 2014). Shortly after, a similar complaint was made about another Marriott property. Upon detailed investigation, the FCC learned that the Hotel giant not only blocked personal Wi-Fi hotspots but charged its guests double to use the hotel Wi-Fi connection. If users didn’t pay the double charge, they risked losing Internet connection once they approached a conference centre. By disabling Wi-Fi, the hotels were able to charge conference attendees between $250 and $1,000 per device to use its own Wi-Fi. Although Marriott International defended the practice by claiming that it protects against “rogue wireless hotspots that can degrade service, insidious cyber-attacks and identity theft”, it agreed to pay the fine (The Independent, 2014).

In my opinion, this is a pretty tasteless and detrimental move on Marriott’s part. Marriott International attracts business men and women from all over the world. Companies from all over the globe use Marriott facilities for week long conferences while individuals travelling on business look to Marriott International for a safe and accommodating stay. Nothing is more frustrating for a hotel guest, specifically one who is away on business, when Wi-Fi does not work properly or guests are charged a ridiculous sum of money for Wi-Fi access. As a hotel giant who has built its brand on serving the business sector, Wi-Fi should be included and there should most definitely not be a scandal of this calibre. I fully agree that companies should take precaution and ensure that all guests are provided with safe access to Wi-Fi hotspots. However, intentionally disabling personal hotspots while also charging consumers alarmingly high fees to use the hotels own Wi-Fi network is absolutely intolerable. This practice not only forces users to pay double if they chose to embrace the high Wi-Fi access fee, however it also encourages many to forge their Internet access. Thus, hindering the company’s promised service to its guest and making the hotel chain an unlikely accommodation for its business clientele. The financial repercussions for these crimes against their clientele as well as the hindrance to their reputation will surely be felt by the hotel conglomerate for years to come.

Source of Article: http://www.nbcnews.com/tech/tech-news/marriott-fined-600-000-fcc-blocking-wi-fi-n217886

“Marubeni Corp., a Japanese trader that with a partner bought Canada’s Grande Cache Coal Corp. for about $1-billion (U.S.) three years ago, said it would dispose of the asset for a nominal $1 to a Hong Kong mining investor. “

This article was quick to grasp my attention because I was able to create an instant connection. As previously discussed in class 9, costs under uncertainty can ultimately lead to fatal losses for investors. Three years ago when coal reached new highs, Marubeni Corp. over paid significantly for stakes in Grande Cache Coal Corp. As a result of optimism surrounding Chinese steel makers growing demand for coal, Marubeni Corp. over paid 70% for stakes in a company which many believed had great potential for economic growth in the future. However, as demand slowed and coal prices began to plummet, Grande Cache Coal Corp lost a great deal of traction and appears to not be recovering anytime soon. Like so many business ventures, almost all investments come with some form of risk. With direct reference to the article“A 120-Year Lease on Life Outlasts Apartment Heir” even though financial returns sometimes seem inevitable, in business you must always expect the unexpected. Whether it be the case of a woman living till the age of 120, or a company with great potential that completely falls apart, there is always uncertainty when it comes to financial transactions. Personally, this article humored me a little. Despite being an established trader, you would presume that Marubeni Corp. would know better than to simply jump on board a company when commodity prices are at all-time highs. I am no expert, however in my limited investing experiences it seems as though the general rule of thumb is to buy low and sell high. Although this general rule may seem quite obvious, time and time again we see investors pouring money into stocks as they reach all time highs, with hopes of reeking substantial returns on their investment. In the end, Marubeni Corp. sold their stakes in the comapny for significantly less than what they originally paid.

Source of Article/image: http://www.bnn.ca/News/2014/10/1/Japanese-trader-offloads-1-billion-Canadian-coal-mine-for-1.aspx