FIFA: Fédération Internationale de Football Association

In the article, “How South Africa can offer Brazil a World Cup lesson”, Geoffrey York offers his opinions regarding the financial decision making of World Cup host cities and questions the ethical behaviours of FIFA. In business, most decisions are made based on financial statements, and projection models. It is safe to assume quantitative decision-making skills are required prior to purchasing a stock, purchasing a business, applying for a loan, and even building a soccer stadium.

Why does the World Cup impair cities financial judgements?

There are multiple reasons why former World Cup host cities lose exponentially on stadiums that once graced the best footballers in the modern era. The first reason is simply due to FIFA and the standards they require. Soccer is the most played and most watched sport in the world. Therefore when a city is asked to host a World Cup there is nothing they won’t do to appease the regulations. For example, South Africa built a stadium complimenting Cape Town’s majestic waterfront real estate. The president of FIFA stated the viewers on television would rather see a water front then an impoverished, poverty stricken area. Furthermore, the stadium now sits unused due to high operation prices, and rusting due to the sea salt winds. In summary, FIFA requires certain standards that ethically do not make sense for host cities but due to the fear of losing the host city status they abide to the rules. In fact, it is interesting to see where the majority of profits from the world cup go. Intuitively, most would think the host city, however it is in fact FIFA, the non-profit organization. Therefore, is FIFA unethical and corrupt? To some extent, that is a valid topic of discussion, however, the host cities are the ones that make the final decision. For instance, Brazil the host of the 2014 World Cup built a world-class stadium in Manaus.

Manaus: in relation to Brazil and the Amazonas.

As illustrated by the photo to the right, Manaus is in the Amazonas. This means, the only possible way to get to the stadium was by boat up the amazon or automobile. Note there is no air travel and Manaus does not have a professional team. At this point Brazil should have seen red flags, as when the tournament is over that stadium will be completely under-utilized .

This photo illustrated how there are two large stadiums in close proximity. Fittingly, the slightly larger more visually appealing stadium was required for the World Cup

In conclusion, logical reasoning should back all business decisions that are made; however when the World Cup comes around these judgements are clouded. FIFA is at fault for their unethical business behaviour leaving host cities in ruins while they are left counting profits. Nonetheless, the host cities are also at fault because they should consider the long term impact of their decisions. This is a problem that will continually face World Cup host cities and unless the financial decision-making is altered, the World Cup will force cities into bankruptcy rather than celebrate international soccer.

Sources Used:

York, Geoffrey. “How South Africa Can Offer Brazil a World Cup Lesson.” Globe and Mail 8 June 2014: n. pag. Print. Click Here: For Link 

Class 16 Finance 2 Notes:

What is Tangoo? Click this link for a brief video summarizing the company.

Tangoo is a pocket concierge that organizes personalized social outings. Tangoo is able to plan perfect outings by understanding the mood of the consumer and the occasion. For example, if you are looking to go on a romantic date with live music, Tangoo will produce a list of restaurants that fit your needs in your city of choice (Vancouver, Calgary, Montreal and Toronto). Tangoo is an example of how Paul Davidescu (CEO) was able to develop his idea into a tangible business. Davidescu started developing this product while he was an attending the Sauder School of Business at the University of British Columbia. Moreover, as any good entrepreneur would, Davidescu looked at what issues involving restaurants bothered him and decided Tangoo would provide consumers satisfaction and convenience. (Class 14 Notes).

Tangoo will be featuring on Dragons’ Den November 26, 2014.

Tangoo will be on Dragon’s Den November 26, 2014 asking successful entrepreneurs to invest in their company. Tangoo is a great tool to reduce stress, however the application is available for free. How will Tangoo ever be profitable? I predict that Tangoo will receive an investment on Dragons Den, with mandatory conditions to help increase the profitability of the company. The conditions most likely will be to expand across Canada and continually develop a consumer market. In the long run, Tangoo will be able to exploit this consumer market by charging for and advertising their application. These steps will allow Tangoo to assert themselves on the top of the online concierge positioning ladder while maximizing profitability for the company.

Sources Used:

Kroeker, Jeff. “Dinner Planning Company Re-emerges Overnight as Pocket
Concierge.” Globe and Mail 3 Oct. 2014: n. pag. Print. Click Here: For Link

“Tangoo Opens Early Access for its New Pocket Concierge Application.” Vancity 
Buzz 10 Apr. 2014: n. pag. Print. Click Here: For Link

Class 14 Innovation and Entrepreneurship Notes:

In the opinionated blog post, “What Is The Relationship Between Corporate Culture And Strategy” Torben Rick[1], the author, discusses how corporate culture and strategy correlate—specifically what is most important for a company. Rick concludes that strategy sets the path for a company to follow; however, culture is what pushes the company forward along this path.

I agree with the philosophy that corporate culture is more influential than corporate strategy. This is proven in firms such as Zappos, Twitter and Southwest Airlines. Zappos prides itself on employee satisfaction because they believe there is a proportional relationship between the employee and the customer. In essence, an employee who is well treated is more likely to treat customers with respect, which ultimately leads to an increase in total revenue. Zappos provides incentives (free food, 100% medical and dental coverage) for employees because they believe the money that is put into employee satisfaction yields larger profit margins.

Conversely, companies in which strategy overpowers corporate culture often retain fewer customers and become less profitable in the long run. For example, Michael Dell, the founder of Dell Computers, was innovative with his direct business model approach, which reduced inventory turnover and cut out the middleman process. Dell’s strategy had merit however the company’s corporate culture took a backseat. Dell is now known for their notorious time-consuming customer service call center. This has lead to an abbreviation of the Dell logo into a Hell logo in terms of customer service as shown in the figure below.

In summary, as Torben Rick stated,“Culture trumps strategy every time – culture eats strategy for breakfast”. In order for a company to maximize profitability, corporate culture must drive a company along the path strategy sets. As established companies that have superior corporate culture (Zappo) are excelling in todays economy, companies driven by corporate strategy have shown tendencies to struggle (Dell).

[1] Torben Rick is an experienced senior executive, both at a strategic and operational level at Meliorate Consulting Firm. Rick also has International experience from management positions in Denmark, Germany and Switzerland.

Critical Thinking Application: Does corporate culture and strategy exist in professional sports?

• Yes.
  

  The Original Six, are the first six NHL teams. Each has a prevailing hockey culture. In addition, these six teams have more Stanley Cups combined than the rest of other 24 NHL teams.

• For example, in the National Hockey League (NHL) cities such as Boston, Toronto, Detroit and New York have a hockey culture that has lasted and acted as the face of the franchise for decades. Conversely, cities such as Phoenix, Nashville, and Florida focus more on strategies in order to win games. Therefore, it is of no surprise that the cities with greatest corporate culture attract the most talented players and are the must successful.

Sources Used:

Rick, Torben. “What Is the Relationship between Corporate Culutre and Strategy.” Meliorate. N.p., 7 June 2013. Web. 8 Nov. 2014. Click Here: For Link

Commerce 101 Class 6 Operation Notes

Commerce 101 Class 19 People, Culture, and Teams Notes

For 117 years, the Canadian Government mistreated the First Nations people—making their children attend residential schools designed to assimilate their original culture. The Government was allowed to do this under the Indian Act. Now, the Indian Act has been amended in order to protect the native population. Nevertheless, how is this external factor (First Nations) impacting Taseko Mines?

Taseko Mines is a $1.1 billion company that is looking to manufacture a copper-gold mine located in Dasiqox Park. However, the Tsillhqot’in people have declared Dasiqox Tribal Park as their sovereign territory. Taseko was forced to abandon their potential prosperity mine. Taseko then went on to purchase Curis Resources, a copper developer, in Arizona.

This is a photo of the land that Taseko is looking to exploit for their mining site.

The situation between Taseko and the Tsillhqot’in exemplifies how a P.E.S.T analysis can be utilized. For instance, the Tsillhqot’in people declared Dasiqox a Tribal Park as they believed Taseko’s development on their property would destroy the terrestrial and aquatic ecosystems. Therefore, if Taseko were to continue with their project they must appease the Social-Cultural sector. This is possible for Taseko. However, in order to reduce pollution and destruction of the ecosystem the company must hire more skilled workers to meet the required protocol. Consequently, the economic sector will be affected. An increase in the price of labour will increase the total revenue and ultimately reduce the total profit. In summary, a  P.E.S.T analysis can be useful. For example, Taseko weighed its viable options and in the end declared that continuing to build their proposed New Prosperity mine would be inefficient.

How could this problem have been solved from the beginning?

Taseko should have discussed their business plan with the Tsillhqot’in people. By doing this, Taseko would either agree to meet the terms of the Tsillhqot’in people or abandon the idea before resources were devoted to the project.

Source(s) Used:

Pynn, Larry. “Tsillqot’in Set To Declare Site Of New Prosperity Mine A Tribal
Park.” The Vancouver Sun 11 Sept. 2014: n. pag. Print.

http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html

Montpetit, Isabelle. “Background: The Indian Act.” CBC News 30 May 2011: n. pag.
Print.

http://www.cbc.ca/news/canada/background-the-indian-act-1.1056988

Hewlett-Packard has provided electronic hardware, software and services to consumers since its inception in 1939. However, HP has,  “struggled to adapt to the new era of mobile and online computing.” This has led, Meg Whiteman (CEO of H.P), to consider dividing the company into two sectors to focus more on faster-growing corporate service markets. In the global market, HP’s market value is $66-billion while competing firms such as Apple are valued at $596-billion and Microsoft  at $380-billion. Lenovo, a Chinese PC maker, also overshadows HP. Therefore, HP has re-evaluated their business model and is currently discussing a split in order to revamp their company before they go bankrupt and/or a larger company buys them out.

If HP does indeed split into a PC and a printer company, what will be the business incentive behind such a move? Paul Cubbon’s Vimeo video entitled, “Intro to Positioning and Value Propositions provides reasoning. Within positioning there are ladders representing sectors of the market. For example, Cubbon discusses how Volvo is on top of the Safety ladder in the mind of automobile consumers. Therefore, it is difficult for a company such as Toyota to match or surpass Volvo’s stature in the mind of consumers. Much like Toyota, HP has found themselves below other thriving companies. Therefore, rather than cutting their losses and accepting themselves as a tier two company, HP is pledging a reformation. By splitting into two companies HP is now able to target a ladder in which they can excel in. If HP does decide to split into two companies, it will be for the purpose of utilizing their resources and exploiting an open sector in order to ultimately claim a top spot on the positioning ladder.

Source Used:

“Silicon Valley Giant Hewlett-Packard To Split In Two: Report.” The Globe And 
Mail 5 Oct. 2014: n. pag. Print.

http://www.theglobeandmail.com/report-on-business/international-business/us-business/silicon-valley-giant-hewlett-packard-to-split-in-two-report/article20938032/

In the article, “Technology Takes the Wheel,” Aaron M. Kessler is summarizing Valeo’s (French Company) proposal to revolutionize the car industry. Valeo is proposing a program for a car that does not require human interaction—“the driverless car”. “Driverless valet parking” would be a catalyst feature promoting Valeo’s product. Through the push of a button on a smartphone your car will be able to park itself using sensors communicated with systems that monitor each parking space. The “driverless car,” is also proposing eye recognition software, which will detect the pattern of eye movements as you are driving. If the sensor senses you are fatigued it may use a navigator to locate the nearest coffee store, or take complete control of the car. This technological revolution is intended to provide “greater comfort and relaxation” while reducing the number of motor-vehicle accidents.

Nevertheless, how is this article business related? Taking Porter’s generic strategies into consideration, Valeo is demonstrating a differentiation strategy as they are intending to revolutionize the car industry. The “driverless car” is taking a relatively standard concept of technology within automobiles, and altering it as a unique product targeting an entire industry. However, in order for a differentiation strategy to be successful: the firm must have an access to leading scientific research, highly skilled development team, strong sales, and a reputable corporate background. The aspect of Valeo’s company which will be their achilles heel will be a reputable corporate background. As, Valeo is not a global figure yet it will be difficult for consumers to fully trust the company that has yet to prove themselves.

In conclusion, Valeo proposed a “driverless car” in order to reduce total automobile accidents and allow a driver comfort and relaxation. In the business realm, this market strategy is called a differentiation strategy. Valeo is producing a unique product that will target the entire automotive industry by 2020. It will be interesting to follow Valeo and the automobile industry and see whether the “driverless car” will prosper or fail and if it does succeed will the industry change forever?

This Youtube link demonstrates the Valeo driver-less parking prototype.

https://www.youtube.com/watch?v=u5eK1dCuSk4

Source Used:

Kessler, Aaron M. “Technology Takes the Wheel.” The New York Time 5 Oct. 2014: 
     n. pag. Print. 

http://www.nytimes.com/2014/10/06/business/technology-takes-the-wheel.html?_r=0