Natalie Hayworth

The market is a volatile force, changing directions quickly and destroying those not quick enough to adapt or withstand the pressure. As seen in the Wall Streets Journal’s description of the once market leader in photography, Kodak, the market changes rapidly due to factors such as technology. The failure to evolve through diversification of product range, investment in innovative ideas, etc can have detrimental on the survival of a business. The Economist compares the Kodak moment to the introduction of E-cigaretttes in the tobacco industry.

Tobacco firms are in competition to a new substitute, which poses a large threat with over 7m people estimated to be using e-cigarettes in Europe alone. The key mistakes of Kodak can be compared to the E-cigarette epidemic in the tobacco industry.

1. Recognise the change in the industry and the potential obsoleting of non e-cigarette products.
2. Innovate to remain current and appealing to consumers such as through branding.
3. Change with the market, refrain from prolonging life of existing product lines.
4. Design strategy based on the consumers changing demands.

These articles demonstrate the power of the monster of volatility in every industry in the marketplace and that the challenges faced in each can be similar.

On September 30th 2013, the Globe and Mail questions “whether Fairfax can raise the money… to whether BlackBerry is worth that much to begin with”.

The worth of a company is critical to companies such as BlackBerry, guiding investors such as Fairfax in their decision making procces. Static valuation includes the use of balance sheets, current value of assets to illustrate its liquidation value. According to the Financial Times, BlackBerry has “a collection of patents that could be worth US$2 billion to $3 billion. These factors of valuation don’t give a full picture of the value of BlackBerry to a future investor. It demonstrates the importance of looking at the value of a company from a forward looking approach including technical and fundamental value.

• Technical Value: market place value
• Fundamental Value: expected rate of growth, degree of risk

In the case of Blackberry, the technichal value is $4.7 billion (US) as that is what Fairfax is willing to pay for the company. The Fundamental value is constantly changing as share prices fluctuate, positive/negative media rises and suspense over the future of blackberry heightens. This article illustrates the application of valuation and its fundamentality in the business world.

In 1961, the controversial experiment conducted by Stanley Milgram explored obedience to authority. According to Milgram’s Obedience to Authority Test (BBC TV), “the experiment illustrated whether ordinary law abiding people would give a stranger a lethal electric shock in the name of science”. The experiment showed that the majority of the participants would give lethal shocks under the name of authority.

In September 2013, UBC Sauder  “Frosh” authoritative figures (leaders) introduced chants of an inappropriate nature and were known to be not acceptable in public. The majority of Sauder students, you talk to about the rape chant will give rationalisations such as ‘the leaders told us to’, ‘I felt left out if I didn’t join’, ‘peer pressure’, etc. Ultimately, that it was ‘okay’ to sing due to the fact that the responsibility was with an authority figure.

This demonstrates a fundamental ethical question of whether the media should blame Sauder School of Business for encouraging a ‘rape culture’ or to address a fundamental societal dilemma in which people don’t think critically about what they are doing. It can be compared to the Nazis, to Milgrams experiment to mobs, which illustrate the evident lack of conscious decision making involved in ‘joining the crowd’ or ‘obeying an authoritative figure’.