DirectBuy is a membership buying company which has locations all over the United States and Canada. The company offers manufacturer-direct wholesale prices on products such as home furnishings and home improvements.

DirectBuy bonds have dropped 23% after the company stated to investors that new memberships had fallen and that the Chief Financial Officer had left the company. The bond-price reporting system Trace reported that the $334 million worth of 12% notes due in February 2017 fell 67.5 cents on March 23, 2011.

The concept of buying directly from the supplier is often seen in the transaction of services, and is less common in the exchange for goods. By cutting out the middleman, the company is able to mark up prices and improve its margins. This results in ability for the company to customize its goods to better suit its consumers. The main reason why customization has been proven difficult is due to the fact that a certain company may not have the volume required to spread the fixed costs.

Serviam. “DirectBuy – Please Don’t Sent Out Email to Spammers”. <ttp://iwillserve.wordpress.com/2009/11/28/directbuy-please-dont-send-our-email-addresses-to-spammers/>

The Business Processing Association of the Philippines announced that the call center industry is expected to sustain its growth over the next year. A recent survey conducted by the GlobalEnglish Corp. illustrated that the Philippines is the leading country in terms of business English proficiency. BPAP and the Contact Center Association of the Philippines have created a partnership with academic institutions to offer students internships at BPO companies.

The growing popularity of call centers around the world demonstrates the increasing globalization in our society today. This concept of outsourcing creates more opportunities for transnational corporations to minimize their production and service costs. While globalization can be considered beneficial to participating countries due to the job creation it creates, it can also be seen as damaging to local businesses and fledgling companies.

“Telemarketing Call Center Services”. <http://telemarketingcallcenterservices.blogspot.ca/>

This year Nintendo, the world’s largest manufacturer of video-game devices, cut its profit forecast by 5.4 percent and lowered its estimate for sales among depreciating demand.  The lowering of product demand is due to the increasing competition from smartphone and tablet computers. In total, retail sales of video-game devices and accessories in the U.S. fell by 24 percent last month compared to a year earlier. This lack of profits was not what analysts had predicted while previously putting together Nintendo’s profit forecast.

A company’s forecast is a prediction of the possible scenarios that the firm will face and the likelihood of them happening. It is not a single number but rather an option followed by a percent. In other words, is a process used to estimate future patterns by analyzing business data.

Bangladesh President Zillur Rahman has brought in a new law which will limit the power of the independent directors of Grameen Bank. The presidential decree also grants a government-selected chairman the ability to pick a new managing director to take over the micro-lender bank from founder Muhammad Yunus. Critics of this new law are worried that only pro-government candidates will make it through the selection process. Mohammad Yunus was officially fired last year for exceeding the mandatory retirement age of 60. He had previously challenged this policy in the Supreme Court, but lost.

Mohammad Yunus  can be defined as a social entrepreneur who targeted an unfortunate but stable equilibrium that had previously caused suffering in his home of Bangladesh. He established the first micro-lending bank called Grameen Bank, which is classified as a social enterprise that has a social and economic impact on its community. His forced retirement is an unfortunate incident but the social enterprise that Mohammad Yunus developed will have an extremely long-lasting impact on the citizens of Bangladesh.

“Mohammad Yunus”. <http://links.org.au/node/1955>

Samsung is currently being accused of mistreating factory workers in China. The accusers claim that employees are working over 100 hours of overtime a month, children under 16 are working in the factories, and that the company failed to provide appropriate safety equipment. These alleged mistreatments could prove to be very damaging to Samsung as the company owns and controls many of the factories in question. This means that the firm cannot defend themselves by claiming to had no knowledge of the conditions or deny responsibility, as Apple did in their situation.

Examples of unethical business practices are abundant in our world today. Some key points that business managers must keep in mind is that ethics can prove important while running a respectable and credible business. It is essential that they do not take advantage of the vulnerable consumer, take into account the community while making important decisions, and recognize that consumers want to do business with a company that they trust as reliable and not exploitive.

Walmart is a dominant participator in the retail industry, but it is unlikely that this will remain the case in the near future. There has been speculation that Walmart needs to develop new differentiators because price and assortment of goods is no longer considered a point of difference for the company. In the US market the saturation of supercenters, which has been key to Walmart’s success, has reached an all time high. Natalie Berg, a global research director, was quoted in supermarket.co.za as saying that Walmart “will have to focus increasingly on…previously unpenetrated areas”.

Photo Source: <http://technorati.com/women/article/walmart-is-watching-you1/ >

This issue is directly related to our class lesson where we learned about Porter’s Five Forces. With such a broad industry such as the supercenter industry, there are fewer substitutes and more rivalries evident. The intensity of rivalry within an industry is characterized by the larger number of firms, low levels of product differentiation, and industry shakeout (when new firms enter a market as a result of the potential for high profits). All these factors have contributed to increased competition and the need for Walmart to further differentiate themselves from their competitors.

Plan for the Northern Gateway Pipeline
Photo Source: Enbridge Northern Gateway Pipeline. <http://www.northerngateway.ca/ >

In Sabryna Ko’s UBC blog she writes about how Premier Christy Clark wants a fair share of the revenues from Enbridge’s proposed Northern Gateway Pipeline. This pipeline, which would run from Alberta to the west coast of B.C., has been the center for much controversy. Sabryna explains in her blog that the project would “help the Canadian economy” yet “also poses a threat to (British Columbia’s) environment”.

Personally, I am greatly opposed to the idea of a major twin pipeline running through the city. Enbridge has been responsible for 804 spills between 1999 and 2010, which released 168, 645 barrels of oil into the environment¹. The landlocked area proposed for the pipeline means that a spill could not be readily flushed out and the shoreline would require manual clean up. The risk of damage to our ecosystems as well as the clean up costs greatly outweighs the potential economic benefits for the project.

The topic of the Northern Gateway Pipeline is constantly being debated. What would your perspective be? Is a boost in the economy worth the potential threat of an oil spill?

More information here.

¹ “Enbridge”. Wikipedia.com. September 18, 2012. September 30, 2012. <http://en.wikipedia.org/wiki/Enbridge >

Today I found a blog called The Business Blog, which has an entry all about getting started with investing online. This caught my attention because it’s incredible how so much of our lives revolve around the Internet, and apparently investing is no exception.

With our generation growing up in a time where we are so accustomed to things such as online shopping or Skype, online investing is just another natural progression for us.  Since online trading tools have become more accessible to everyone, it has made a real difference in an investors earning ability and is therefore is a more efficient way to invest.

This blog’s message is important because the popularity of online investment will continue to progress after we graduate. We should familiarize ourselves with the protocols and tips that we might need once we have graduated and have jobs. Having the skills to do such things online will help us adapt to the constant changes in technology that will happen in future years.

Photo Source: datOnline.com. “First Direct Online Banking”. <http://www.datonline.ca/articles/tips-on-internet-banking/>

One interesting issue that I found interesting was written about on Jessica Zhang’s UBC blog.

Organizations such as the International Baby Food Action Network (IBFAN) claim that Nestlé’s promotion of formulas over breastfeeding has lead to serious health problems and deaths among infants in less developed countries. Nestlé has been accused of using unethical marketing methods while promoting their infant formula.

The IBFAN claim that the company distributes free formula samples to new mothers in hospitals. Since the supplementation interferes with lactation, the families must continue buying the formula.  According to Jessica Zhang’s blog the formula, which must be mixed with water, is often contaminated due to poor sanitation and results in malnutrition.

As we learned in class, there are three main points that a good manager must do: understand what business they’re in, understand the value proposition and do not take advantage of vulnerable people. This is an example of bad business ethics because Nestlé is taking advantage of vulnerable consumers, which in this case are uneducated new mothers in third world countries.

For more information please visit Jessica Zhang’s UBC blog.

Photo Source: Linda Dias. African American Mother Baby. Science and Sensibility. September 6, 2012. <www.scienceandsensibility.org/?attachment_id=5343 >

BP, the company responsible for the largest oil spill in history, is being sued for common law fraud, negligent misrepresentation and statutory fraud by investors. The investors are claiming that BP’s CEO misled them on the extremity of the spill, BP’s level of responsibility and its safely regulations. From 2007 to 2010, BP released legal documents that expressed its devotion to safety, and it was these statements that minimized the decline in stock prices. Yet site investigations found that it was safety failings that led to the spill and that BP lacked any tools for dealing with such disasters but continued to operate. Honestly, stock prices would’ve gone down either way. I believe that if BP had been honest the stocks would’ve plummeted, but the company’s integrity and credibility would remain intact. If their reputation as an honest business remained then the possibility of recovery in the future would be more assured. Consider Maple Leaf Foods and how they responded to their disaster by immediately taking full responsibility of the situation and how they are recovering. After how BP responded by lying to investors and destroying their credibility it is doubtful that they will ever recover.

Additional information here.

U.S. Coast Guard. Deepwater Horizon. <http://www.thedailygreen.com/environmental-news/latest/gulf-of-mexico-oil-spill >